<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
            ______________________________________________________

                                   FORM 10-K
(Mark One)

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

     For the fiscal year ended January 31, 1999.

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

     For the transition period from _____________ to ___________


                        Commission File Number: 0-21448

                          National Home Centers, Inc.
            (Exact name of registrant as specified in its charter)

               Arkansas                                 71-0403343
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

            Highway 265 North
          Springdale, Arkansas                             72765
(Address of principal executive offices)                 (Zip Code)

      Registrant's telephone number, including area code: (501) 756-1700

       SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

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

      Common Stock, $.01 par value traded on the Nasdaq Small Cap Market

     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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K ((S) 229.405 of this chapter) (is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment of this Form 10-K [_]

     On April 5, 1999, there were outstanding 7,142,251 shares of the
registrant's Common Stock, $.01 par value.

     The aggregate market value of the 2,474,239 shares of Common Stock
held by non-affiliates of the registrant as of April 5, 1999 was $2,628,879.

     DOCUMENTS INCORPORATED BY REFERENCE

     National Home Centers, Inc. Annual Report for fiscal year ended
January 31, 1999 (certain portions incorporated by reference into Part II)

     Proxy Statement for Annual Meeting of Stockholders, June 3, 1999 and
Adjournments (certain portions incorporated by reference into Part III)
<PAGE>
 
PART I

Items 1 and 2.  Business and Properties.
                ----------------------- 

                                  THE COMPANY
Background

          General.  National Home Centers, Inc. ("NHC" or the "Company") started
its building supply operations in 1972 and opened its first store, serving
primarily professional contractors, in 1977.  In 1983, NHC began implementing a
dual-customer strategy, serving both professional contractors and retail
consumers, but in the last several months the focus has shifted to professional
contractors.  Today, the Company operates one appliance sales warehouse and
seven contractor sales locations all in Arkansas, and approximately 70% of its
sales are to contractor consumers.

          The Company operates its stores in four Arkansas markets:  Northwest
Arkansas (2 stores); Little Rock (3 stores); Russellville (2 stores); and Fort
Smith (1 store).  NHC also operates fabrication facilities for value-added
conversion products such as countertops, pre-hung door units, and window units.
During the first quarter of 1998, NHC closed its Rodney Parham store in Little
Rock and sold its Fayetteville superstore.  During the second quarter of 1998,
NHC closed and sold its West Rogers store.  The Company has also reduced the
home center portion of its Russellville store.

          Executive Offices.  The Company's executive offices are located at
Highway 265 North, Springdale, Arkansas 72765.  The Company's telephone number
is (501) 756-1700.

                                   BUSINESS

General

          The Company is a retailer of home improvement products and building
materials with an established core market primarily in Arkansas, but including
Oklahoma and Missouri.  The Company operates large building supply operations
serving both retail consumers and professional contractors.  NHC's business
strategy capitalizes on professional contractor sales by providing a broad
product assortment and a full range of services in each of its four Arkansas
markets.

          The Company operates in the highly competitive home improvement
industry. NHC's primary competition comes from other lumberyards, as well as
home centers, discount retail stores, supermarkets, warehouse stores, certain
specialty stores, traditional hardware, and plumbing and electrical suppliers.
The introduction of national and/or regional home improvement stores to NHC's
markets has significantly increased competition for market share in recent
years. In an attempt to gain market share, these new competitors have offered
reduced prices on products similar to those carried by NHC. This has placed
pressure on NHC's stores and its prospective sales, gross margins, and operating
income. Although NHC's markets are fairly saturated and few national or regional
chains are aggressively expanding, it is possible that competition will continue
to increase in those markets served by NHC. Such additional competition may
adversely affect the Company's future earnings.

          In the previous year, NHC, with assistance from Senn-Delaney, a 
retail-consulting group affiliated with Arthur Andersen LLP, prepared a business
plan (the "Business Plan") based on a realistic assessment of its strengths,
weaknesses and competitive position. The Business Plan was designed to reflect
the operational, marketing, administrative, and financial components of NHC's
turnaround efforts. Many of the components of the Business Plan have been, or
are currently being implemented, including (i) stabilization of the Company for
the opportunity to return to profitability; and (ii) providing a solid

                                       2
<PAGE>
 
base for continued growth within its core markets. In addition, the Company
continues to scrutinize its utilization of resources and methods of doing
business in order to maximize the Company's efficiency, cash flow, and
competitive ability.

Reduction in Exposure of Retail Assets

          The Company initially entered the retail segment of the market in the
early 1980's primarily as a hedge against rising interest rates and reduced
housing starts. As a result of the recent drastic increase in competition for
the retail home improvement dollar and non-inflationary economic environment,
NHC has reevaluated its niche in the industry. The Company has reduced its
exposure to the retail segment of the home improvement industry. Because
regional contractors have long recognized NHC as a quality operation and because
the Company has developed a strong, loyal following of contractors, NHC plans to
reemphasize and refocus its efforts on becoming the leader in the professional
contractor market. For fiscal 1999, NHC anticipates sales revenues from
professional contractors to approach 80-85% of the Company's total revenues. NHC
plans to explore industry consolidation possibilities including, but not limited
to, acquisition of other contractor-related companies.

          The Company has continued to implement its business plan and expand
previous positive results by finalizing the closure of the Rodney Parham and
Fayetteville stores during the first quarter of 1998.  Also, the Company closed
and sold its West Rogers store in the second quarter of 1998 and significantly
reduced the home center portion of its Russellville store in the third quarter
of fiscal 1998.

Capitalization of the Company

          On July 15, 1998, the Company entered into a loan and security
agreement for a new $20 million revolving credit agreement, which expires in
July, 2002. The agreement provides for interest to be charged at .50% per annum
in excess of the Prime Rate. The agreement limits availability to a borrowing
base of 85% and 65% of eligible accounts receivable and inventory, respectively,
with each capped at $10 million. The facility does not contain any financial
covenants. The Company had additional available borrowing capacity of
approximately $2.5 million under the revolving credit agreement as of January
31, 1999.

          Cash from the sale of land parcels, a 10% increase in the inventory
advance rate and continued reduction of retail inventory at its existing stores
has provided the Company with the source of funds necessary to reduce debt.

Monetize Real Estate Values

          NHC sold several pieces of real estate and buildings that no longer
fit in the Company's strategic plan. The following is a table of the properties
sold:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
            Name                      Debt       Selling Price    Acres
            ----                      ----       -------------    -----
<S>                                <C>           <C>              <C>
Fort Smith Land                           -0-    $ 1,778,000       7.5
West Rogers Land, Building &                                      
  Equipment                         5,530,000     10,850,000      20.7
S. Fayetteville Land                      -0-      1,830,000      26.1
Fayetteville Land & Building        2,770,000      6,500,000      15.7
Corp. Office Land                         -0-        247,000      14.7
                                   ----------    -----------
Total                              $8,300,000    $21,205,000
--------------------------------------------------------------------------------
</TABLE>

                                       3
<PAGE>
 
          The Company has made significant strides to pay down debt. By doing
so, NHC will now be able to focus its efforts on implementing a long-term
strategy for continued competition in the home improvement industry. The
following highlight these efforts:

          .  Outside of normal operating activities, NHC generated approximately
             $28,000,000 by refinancing existing debt, reducing inventory
             balances, and monetizing non-producing assets. The majority of this
             amount was used to reduce accounts payable and other long-term
             debt.

          .  Since July, 1998, the Company has been current with all of its
             trade vendors, has reestablished credit lines, and is taking
             advantage of vendor discounts.

          .  NHC has improved its capital structure by obtaining more favorable
             terms on its debt instruments with no financial covenants.

Store Properties

          The following table shows the location, opening date, size,
retail/contractor sales mix and approximate number of SKUs of each of the
Company's stores:

<TABLE>
<CAPTION>
                                                        Area in Square Feet                                              
                             Opening                    -------------------     Retail/Contractor            Fabrication
     Store Location           Date       Acreage     Retail      Warehouse         Mix (%)         SKUs      Operations
     --------------           ----       -------     ------      ---------         -------         ----      ----------
<S>                            <C>       <C>        <C>          <C>            <C>                 <C>       <C>
I.    Northwest  
      Arkansas  
      Springdale             11/83         21       49,300       190,000           20/80         15,000         door, 
                                                                                                               window
      Bentonville            06/92          6       20,200        18,000            5/95          5,000         door,    
                                                                                                               window   

II.   Fort Smith                                                                                                         
      Fort Smith             12/77         10       31,100       110,000           12/88          9,000         door, 
                                                                                                               window

III.  Little Rock                                                                                                        
      North Little Rock      10/85         13       96,200       150,000           40/60         27,000         door, 
                                                                                                               window
      Conway Contractor      05/93          4            0        30,000           0/100          5,000         door, 
                                                                                                               window
      Maumelle               06/93          3            0        20,000           0/100            900                  

IV.   Russellville                                                                                                       
      Russellville           06/93         14       30,000        80,000           25/75         20,000         door, 
                                                                                                               window
      Clarksville            09/95          1            0        14,000           0/100          6,000          -- 
                                                   -------       -------
    Total area                                     226,800       612,000
</TABLE>

          The Springdale, Bentonville, Fort Smith and North Little Rock stores
are leased from the Company's chairman and his spouse. The Clarksville, Maumelle
and a portion of the Russellville properties are leased from third parties.
Lease terms for these properties range from 10 to 15 years and provide for

                                       4
<PAGE>
 
renewal options.  The Conway contractor and a portion of the Russellville
property are owned by the Company.

          The Company owns the land and building for the closed Conway retail
store and leases approximately one-third of the store to Office Depot, Inc. Mr.
Newman released the Company from the Cabinet Craft lease on April 1, 1998, and
the Rogers contractor lease as of May 1, 1998. The Rodney Parham store is leased
from an unaffiliated third party. The Company subleases approximately one-half
of the store to SteinMart, Inc. The Company is attempting to find a suitable
sublease tenant for the remainder of the building on the lease which expires
June 30, 2003.

          On July 15, 1998, the Company sold the real property and improvements
associated with its closed Fayetteville, Arkansas, supercenter to Home Depot,
Inc. for $6.5 million. On July 30, 1998, the Company sold the real property,
improvements and certain fixed assets associated with its closed west Rogers,
Arkansas, supercenter to Lowe's Companies, Inc. for $10.85 million. Proceeds of
the sales were used to reduce indebtedness associated with the properties and
for general working capital.

          The Company owns a thirty (30) acre parcel in Branson, Missouri. The
parcel is owned free of debt and has been placed on the market for sale.

Fabrication Facilities

          NHC maintains fabrication facilities in Springdale, Bentonville, Fort
Smith, Russellville, Conway and North Little Rock for value-added conversion
products, such as counter tops, pre-hung door units and window units. Management
believes that this vertical integration provides an advantage in serving
professional contractors by offering them a wide variety of products at
competitive prices, thus encouraging increased sales. The Company's door shops
are equipped with modern, automated machinery and are capable of producing high-
quality interior and exterior door units at competitive prices. The Company
manufactures over 9,000 pre-hung door units per month. Door shops, which also
are equipped and staffed to custom cut and produce laminated kitchen and bath
counter tops, serve both retail customers and professional contractors and
enable the Company to provide prompt, local service at lower costs. Management
believes that its fabrication facilities are adequate to meet existing and
foreseeable needs.

Products

          The Company's stores offer a large selection of lumber, building
materials, hardware and tools, electrical and plumbing supplies, paint,
lighting, home decor, pre-hung doors, windows, appliances, cabinets, garden
supplies and seasonal items. Each store currently stocks between 900-27,000
SKUs. Many of the items sold in the Company's stores are nationally advertised,
brand-name products. NHC classifies its product offerings into five categories:

     Building Materials--Dimensional lumber, plywood, roofing, trusses, siding,
     windows, finish lumber, pre-hung doors and mouldings.

     Hardware/Plumbing/Electrical--Electrical wire and wiring materials,
     lighting fixtures, plumbing materials, power and hand tools, and door
     locks.

     Home Decor--Paint, wall and floor coverings and housewares.

     Appliances/Cabinets--Kitchen appliances, washers, dryers, cabinets and
     fireplaces.

     Lawn and Garden--Plants, fertilizer, mowers, garden tools and outdoor
     furniture.

          The percentage of sales accounted for by the merchandise categories
for each of the Company's three most recent fiscal years were as follows:

                                       5
<PAGE>
 
<TABLE>
<CAPTION>
                                     Fiscal Year Ending January 31,
     Products                         1999        1998       1997
     --------                         ----        ----       ----            
     <S>                              <C>         <C>        <C>
     Building Materials                61          54         52
     Hardware/Plumbing/Electrical      15          18         19
     Home Decor                         9          10         11
     Appliances/Cabinets               10          10         11
     Lawn and Garden                    5           8          7
                                     ----        ----       ----
     Total                            100%        100%       100%
</TABLE>

Purchasing

          Except for pre-hung doors which are fabricated by the Company, NHC
purchases its merchandise from more than 650 manufacturers and suppliers. No
single supplier accounted for more than 10% of NHC's total purchases in fiscal
1998. The Company believes it has good relationships with its suppliers and does
not consider itself dependent upon any single source for its merchandise.
Management does not believe that the loss of any single supplier would have a
material adverse effect on the Company.

          The Company's corporate merchandise buyers, located in the Springdale
corporate office, make all decisions on new products to be sold in NHC stores.
Once the corporate buyers have selected a new product, they issue initial
purchase orders for all NHC stores where that product will be sold.  Buyers in
each store are responsible for making subsequent orders for all in-stock
merchandise.  Each store's computer system tracks the quantity of any product
sold and automatically generates recommended purchase orders which are edited by
store buyers who then issue purchase orders directly to the vendor.  Merchandise
is typically shipped directly to the store that will stock the product.  In
addition, sales volumes resulting from successful implementation of the
Company's dual-customer strategy permit NHC to maximize economies available from
discount purchases.  These large volume purchases may be shipped to the
Company's Springdale or North Little Rock stores for subsequent distribution to
other NHC stores in those markets.

Credit

          NHC offers credit for professional contractors which allows those
customers to make purchases at any NHC store. Professional contractors make the
majority of their purchases on credit. Subcontractors hired by a professional
contractor, as well as the property owner, may charge materials purchased for
that job to the professional contractor's account. Credit policies and
procedures are established by the Company's credit department, and all
professional contractor sales representatives are trained in those policies and
procedures. Each of NHC's market areas has a dedicated credit manager who
interacts with sales representatives, management and credit agencies to manage
and monitor customer credit. The Company also has a Corporate Credit Manager who
oversees five area credit managers and activities and policies relating to
contractor receivables. NHC's credit policies are designed to maximize extension
of credit to professional contractors without unduly risking bad credit. Credit
sales accounted for substantially all of NHC's total sales to professional
contractors in fiscal 1998, while the Company's credit loss was 0.54% of
contractor sales. In addition, NHC accepts third-party credit cards such as
MasterCard, Visa, American Express and Discover. During 1998, NHC terminated a
private-label credit program, the National Home Centers Home Project Plus Card,
administered by Household Retail Services, Inc. Approximately 33% of NHC's
retail sales were made on third-party and proprietary credit cards in fiscal
1998.

Marketing

          NHC offers various volume-oriented price levels to professional
contractors to promote larger purchases. The Company's computerized pricing
system permits sales personnel to provide consistent quantity discounts and
immediate response to customer requests for discounts on volume purchases.

          For the past 20 years, the Company has offered professional
contractors a travel incentive program in which customers earn, through their
purchases, credit toward trips arranged each year by the Company. The program,
which has been highly successful in helping the Company increase its share of
the

                                       6
<PAGE>
 
professional contractor business, gives the Company an opportunity to present
product seminars during each trip.  There are currently 289 customers signed up
for an October 1999 trip on a Caribbean cruise.  Builders qualify for the travel
incentive program by purchasing certain volumes of materials and by making
timely payments each month.

          Management believes that its strongest marketing tools are exceptional
customer service and everyday low prices.  Because many retail customers make
buying decisions in the store, NHC focuses its marketing efforts on maintaining
a well-stocked inventory and superior service to encourage add-on sales which
augment the average purchase.  As a result of this approach, NHC spent 0.49% of
sales on advertising in fiscal 1998, primarily on seasonal direct mail
advertising for special promotions and to reinforce customer awareness of its
everyday low pricing.  Television advertising was significantly reduced in
fiscal year 1998.  Management expects advertising to decline as a percent of
sales in fiscal 1999.

Management Information Systems

          NHC's management information systems have been designed and developed
to address a wide range of functions including sales analysis, merchandise
ordering and processing, merchandise management and presentation and financial
management. Through these systems, management has access to concise, relevant
information on performance that includes the daily individual store and
department information necessary for financial and merchandising decisions,
strategic planning and analysis.

          The Company maintains a fully computerized point-of-sale retail
management system and custom-designed software. The Company utilizes IBM RS-6000
hardware and special building materials software developed by Triad/Computer
System Dynamics. NHC's system provides (1) point-of-sale scanning, (2) sales and
inventory tracking, compiling data by store, employee, product category and
individual SKU, (3) receivables tracking, (4) computer generated purchase
orders, and (5) other operating and management reports. NHC is currently
utilizing Electronic Data Interchange ("EDI") with selected vendors.

          NHC's point-of-sale system is a fully integrated sales, credit,
receivables, inventory, purchasing and data collection system. This system
includes UPC scanning for all items sold at NHC stores and provides automatic
price check at the register as well as sales audit reporting, advertised item
reporting, item sales performance and history, daily computer review and
suggested purchase orders. The system also tracks professional contractor
receivables and requires management approval for any transaction which would
exceed the customer's account credit limit. Accounting software handles the
Company's payroll, accounts payable and general ledger. These functions are
centralized at the Company's corporate office. The Company previously utilized
the Oracle Relational Database Management System but will terminate the Oracle
System during fiscal 1999. In the second quarter of fiscal 1999, the Company
plans to have implemented CSD software for accounts payable and general ledger.
This system should allow continued integration of the point-of-sale system and
the accounting system. The Company has entered into service contracts with third
parties for service and upgrades of computer software. Company policies require
daily backup at each store which is maintained at secure off-site locations. In
addition, the Company maintains a standby mainframe unit to operate as backup
for its primary system.

Year 2000 Compliance

          The efficient operation of the Company's business is dependent in part
on its computer software programs and operating systems. These programs and
systems are used in several key areas of the Company's business, including
merchandise purchasing, inventory management, pricing, sales, shipping and
financial reporting, as well as in various administrative functions. The Company
has been evaluating its programs and systems to identify potential year 2000
compliance problems. These actions are necessary to ensure that the programs and
systems will recognize and process the year 2000 and beyond. It is anticipated
that modification or replacement of most of the Company's programs and systems
will be necessary to make such programs and systems year 2000 compliant. The
Company is also communicating with its suppliers and others to coordinate year
2000 conversion. Based on present information, the Company believes that, its
key programs and systems will be year 2000 compliant by May, 1999. However, no
assurance can be

                                       7
<PAGE>
 
given that these efforts will be successful. The Company does not expect
expenditures associated with achieving year 2000 compliance to have a material
effect on its financial results in 1999.

Competition

          NHC operates its stores in four Arkansas markets. The Company's
principal competitors in these markets are Lowe's, Home Depot, Sutherlands,
Cameron Ashley, Meeks, Ridout, and Home Quarters.

Patents and Trademarks

          The Company has obtained federal trademark registration for the
service mark National Home Centers(R). The federal registration covers NHC's use
of the mark for retail lumber, building materials and hardware store services,
but does not contemplate use of the mark on other products.

Employees and Labor Relations

          As of January 31, 1999, the Company employed 445 persons, consisting
of 407 full-time and 38 part-time personnel. Generally, the Company believes
that relations with its employees are excellent. None of the Company's employees
are represented by a union or covered by a collective bargaining group.

Forward Looking Statements

          Forward-looking statements contained herein are made pursuant to the 
safe harbor provisions of the Private Securities Litigation Act of 1995. There 
are various factors that could cause results to differ materially from those 
anticipated by such statements. Investors are cautioned that all forward-looking
statements involve risks and uncertainity. The Company does not undertake to
publicly update or revise its forward-looking statements even if experience or
future changes made it clear that any projected results expressed or implied
therein will not be realized. Factors that could cause actual results to differ
materially include, but are not limited to the following: the strength and
excess of new and existing competition; the Company's ability to maintain
competitive pricing in its markets; the Company's ability to make its management
information systems year 2000 compliant; the Company's ability to maintain
adequate levels of leader support; the Company's ability to increase sales; the
Company's ability to attract, train and retain experienced, quality employees;
the Company's ability to dispose of excess real estate and other assets; general
economic conditions; housing turnover; interest rates; weather; and other
factors described from time to time in the Company's Securities and Exchange
Commission filings.

Item 3.   Legal Proceedings.
          ----------------- 

          The Company is not a party to any material pending legal proceedings.
The Company at times does have routine litigation incidental to its business. In
the opinion of the Company's management, such proceedings should not,
individually or in the aggregate, have a material adverse effect on the
Company's results of operations or financial condition. The Company maintains
insurance in such amounts and with such coverage and deductibles as management
believes are reasonable.

Item 4.   Submission of Matters to a Vote of Security Holders.
          --------------------------------------------------- 

          Not applicable.

PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters.
          --------------------------------------------------------------------- 

          The Company is authorized to issue 25,000,000 shares of Common Stock,
$.01 par value of which 7,142,251 shares were outstanding as of April 5, 1999,
and 5,000,000 shares of Preferred Stock, $1.00 par value, of which no shares
were outstanding as of April 5, 1999.

                                 COMMON STOCK

          The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. Subject
to preferences applicable to any outstanding Preferred Stock, holders of Common
Stock are entitled to receive ratably such dividends as may be declared by the
Board of Directors out of funds legally available therefor. Holders of Common
Stock have no preemptive or subscription rights and there are no redemption or
conversion rights with respect to such shares. The outstanding shares of Common
Stock are fully paid and non-assessable. As of January 31, 1999, the Company's
Chairman beneficially owned approximately 63.0% of the outstanding Common Stock.

          The Company has not previously paid any cash dividends on its Common
Stock and does not anticipate paying any cash dividends in the future. See
"Dividend Policy."

          At April 5, 1999, the 7,142,251 shares of Common Stock then
outstanding were held by approximately 511 persons (excluding persons holding
shares in nominee names). The Transfer Agent and Registrar for the Common Stock
is UMB Bank of Kansas City.

                                       8
<PAGE>
 
          The Company's Common Stock is currently traded on The Nasdaq Small Cap
Market under the symbol "NHCI."  The following table sets forth the quarterly
high and low sales price for the Common Stock as reported on The Nasdaq Small
Cap Market.

<TABLE>
<CAPTION>

Fiscal 1997                                         High            Low
-----------                                         ----            --- 
<S>                                                 <C>            <C> 
First Quarter                                       $2.69          $1.50
Second Quarter                                       2.06           1.50
Third Quarter                                        1.88           0.88
Fourth Quarter                                       1.38           0.88
                                                                       
Fiscal 1998                                                            
-----------                                                            
First Quarter                                        2.50           1.00
Second Quarter                                       2.38           1.13
Third Quarter                                        2.00           1.25
Fourth Quarter                                       1.94           1.00
                                                                       
Fiscal 1999                                                            
-----------                                                            
First Quarter (through April 5, 1999)                1.63           1.00
</TABLE>

As of October 2, 1998, the listing of the Company's common stock moved from the
NASDAQ National Market to the NASDAQ Smallcap Market due to recent criteria
changes for continued listing on the National Market.  The criteria included a
minimum bid price of the Company's stock and a minimum market value of shares
held by the public.  On June 19, 1998, the Company sent a written request for
exception to the Listing qualifications Hearings Panel or NASDAQ, requesting
continued listing on the National Market System.  NASDAQ denied the request, but
determined the Company was eligible for listing on the NASDAQ Smallcap Market.

                                PREFERRED STOCK

          The Board of Directors is authorized to provide for the issuance of
Preferred Stock in one or more series and to fix the dividend rate, conversion
rights, voting rights, rights and terms of redemption, redemption price or
prices, liquidation preferences and qualifications, limitations and restrictions
thereof with respect to each series.  Although the Company has no present
intention to issue shares of Preferred Stock, the issuance of shares of
Preferred Stock or the issuance of rights to purchase such shares could have an
anti-takeover effect and may delay, defer or prevent a tender offer or takeover
attempt that a stockholder might consider in his or her best interest, including
attempts that might result in a premium over the market price for the shares
held by such stockholder.

                                DIVIDEND POLICY

          The Company has not previously paid cash dividends on its Common
Stock. The Company intends to retain any earnings for use in its business and
therefore does not anticipate paying any cash dividends in the foreseeable
future.

Item 6.   Selected Financial Data.
          ----------------------- 

          Incorporated by reference from the section captioned "Selected
Consolidated Financial Data," page 2 of the National Home Centers, Inc. 1998
Annual Report (the "1998 Annual Report").

Item 7.   Management's Discussion and Analysis of Financial Condition and 
          ---------------------------------------------------------------
          Results of Operations.
          --------------------- 

          Incorporated by reference from the sections captioned "Management's
Discussion and Analysis," pages 3 through 5 of the 1998 Annual Report.

                                       9
<PAGE>
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
          ---------------------------------------------------------- 

          Incorporated by reference from the section captioned "Management's
Discussion and Analysis," page 4 of the 1998 Annual Report.

Item 8.   Financial Statements and Supplementary Data.
          ------------------------------------------- 

          Incorporated by reference from the sections captioned "Consolidated
Balance Sheets, "Consolidated Statements of Operations and Retained Earnings
(Accumulated Deficit)," "Consolidated Statements of Cash Flows," "Notes to
Consolidated Financial Statements," and "Report of Independent Public
Accountants," pages 6 through 18 of the 1998 Annual Report.

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          ---------------------------------------------------------------
          Financial Disclosure.
          -------------------- 

          None.

PART III

Item 10.  Directors and Executive Officers of the Registrant.
          -------------------------------------------------- 

          Incorporated by reference from the sections captioned "Election of
Directors," "Executive Officers" and "Section 16 Requirements" contained in the
Company's Proxy Statement for Annual Meeting of Stockholders, June 3, 1999 and
Adjournments (the "Proxy Statement").

Item 11.  Executive Compensation.
          ---------------------- 

          Incorporated by reference from the section captioned "Executive
Compensation" contained in the Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
          -------------------------------------------------------------- 

          Incorporated by reference from the section captioned "Principal
Stockholders" contained in the Proxy Statement.

Item 13.  Certain Relationships and Related Transactions.
          ---------------------------------------------- 

          Incorporated by reference from the sections captioned "Executive
Compensation--Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions" contained in the Proxy Statement.

PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
          ---------------------------------------------------------------- 

(a)  Documents filed as a part of this report.

     1.   Financial Statements.
          -------------------- 

     The following consolidated financial statements of National Home Centers,
Inc. and Subsidiary have been incorporated by reference from the 1998 Annual
Report into Item 8 of this Report.

     Description
     -----------

          Consolidated Balance Sheets
          Consolidated Statements of Operations and Retained Earnings
           (Accumulated Deficit)
          Consolidated Statements of Cash Flows

                                       10
<PAGE>
 
          Notes to Consolidated Financial Statements
          Report of Independent Public Accountants

     2.   Financial Statement Schedules.
          ----------------------------- 

     The information required to be presented in Schedule II Valuation and
Qualifying Accounts is presented in Note 9 of the Notes to Consolidated
Financial Statements.

     3.   Exhibits required by Item 601 of Regulation S-K.
          ----------------------------------------------- 

<TABLE>
<CAPTION>
     Exhibit No.                          Description 
     -----------                          ----------- 
     <S>           <C> 
     3.1           Amended and Restated Articles of Incorporation of the
                   Company./1/              

     3.2           Amended and Restated By-Laws of the Company./1/
                                                                     
     4.1           Form of the Company's Common Stock Certificate./1/ 
              
     4.2           Amended and Restated Articles of Incorporation of the
                   Company, Sections 5 through 7./1/
                                                    
     10.1          Life Insurance Policy, dated May 15, 1983, issued by
                   Executive Life Insurance Company on the life of Dwain A.
                   Newman, in the amount of $1,000,000 with the Company named as
                   beneficiary, including Assignment, dated September 10, 1992,
                   to the Arkansas Teachers Retirement System./1/
              
     10.2          Lease Agreement dated September 1, 1992 between Dwain A.
                   Newman and Glenda R. Newman and the Company for the
                   Springdale, Arkansas store./1/

     10.3          Lease Agreement dated September 1, 1992 between Dwain A.
                   Newman and Glenda R. Newman and the Company for the North
                   Little Rock, Arkansas store./1/              

     10.4          Lease Agreement dated September 1, 1992 between Dwain A.
                   Newman and Glenda R. Newman and the Company for the Fort
                   Smith, Arkansas store./1/

     10.5          Lease Agreement dated June 1, 1992 between Dwain A. Newman
                   and Glenda R. Newman and the Company for the Bentonville,
                   Arkansas store./1/
              
     10.6          Lease Agreement dated July 1, 1993 between Parham Properties,
                   Inc. and the Company for the Little Rock, Arkansas store./2/
     
     10.7          Lease Agreements dated December 22, 1992 between Valley Park
                   Limited Partnership and the Company for the Russellville,
                   Arkansas store./1/

     10.8          Subordination, Attornment and Non-Disturbance Agreement and
                   Estoppel Certificate dated September 10, 1992 between ATRS,
                   the Company, and Dwain A. Newman and Glenda R. Newman for the
                   Springdale, North Little Rock and Fort Smith Leases./1/
              
     10.9          Form of the 1993 Employee Stock Purchase Plan of National
                   Home Centers, Inc./1/

</TABLE> 

                                       11
<PAGE>
 
<TABLE>
<CAPTION>
     Exhibit No.                          Description
     -----------                          ----------- 
<S>                <C> 
     10.10         Form of the Company's 1993 Incentive Compensation Plan./1/
              
     10.11         Loan and Security Agreement dated December 29, 1992 between
                   the Company and MetLife Capital Corporation./2/
              
     10.12         Note & Security Agreement dated 6/15/94 between the Company
                   and NationsBanc Leasing Corp./3/
              
     10.13         Assignment of Policy dated 5/20/94 between the Company and
                   the Newman 1994 Family Trust./3/

     10.14         Assignment of Policy dated 5/20/94 between the Company and
                   the Newman 1994 Family Trust./3/
              
     10.15         Split Dollar Insurance Agreement dated 5/20/94 between the
                   Company and the Newman 1994 Family Trust./3/
                                                                
     10.16         Split Dollar Insurance Agreement dated 5/20/94 between the
                   Company and the Newman 1994 Family Trust./3/
                                                                
     10.17         Guaranty Agreement effective May 20, 1994./4/              

     10.18         Supplemental Security Agreement and Term Promissory Note No.
                   1 dated December 6, 1994 between the Company and MetLife
                   Capital Corporation./5/
              
     10.19         Promissory Note and Mortgage dated May 5, 1995 to Simmons 
                   First Bank of Arkansas for Conway, Arkansas Store./6/
              
     10.20         Form of the Company's 401(k) Adoption Agreement with First
                   Tennessee National Bank as Trustee./7/
                   
     10.21         1996 Long-Term Performance Plan./8/

     10.22         Loan and Security Agreement with NationsCredit Commercial
                   Funding./9/

     10.23         Real Property Purchase Agreement between National Home
                   Centers, Inc. and Home Depot U.S.A., Inc./9/
              
     10.24         Agreement to Sell and Purchase Real Estate between National
                   Home Centers, Inc. and Lowe's Home Centers, Inc./9/

     11.1          Computation of Loss Per Share.

     13.1          National Home Centers, Inc. 1998 Annual Report (only those
                   portions specifically incorporated herein by reference shall
                   be deemed filed with the Commission).
              
     21.1          Subsidiaries of the Company./1/ 
              
</TABLE> 

                                       12
<PAGE>
 
     Exhibit No.                          Description
     -----------                          -----------

     27.1          Financial Data Schedule. 

(b)  Reports on Form 8-K.
 
     The Company did not file any Current Reports on Form 8-K during fiscal
1998.

/1/   Incorporated by reference from National Home Centers, Inc. Form S-1
      Registration Statement No. 33-60078, as amended, filed with the Securities
      and Exchange Commission on March 26, 1993.

/2/   Incorporated by reference from National Home Centers, Inc. Annual Report
      on Form 10-K for the fiscal year ended January 31, 1994, filed with the
      Securities and Exchange Commission on April 29, 1994.

/3/   Incorporated by reference from National Home Centers, Inc. Quarterly
      Report on Form 10-Q for the period ended July 31, 1994, filed with the
      Securities and Exchange Commission on September 15, 1994.

/4/   Incorporated by reference from National Home Centers, Inc. Quarterly
      Report on Form 10-Q for the period ended October 31, 1994, filed with the
      Se curities and Exchange Commission on December 15, 1994.

/5/   Incorporated by reference from National Home Centers, Inc. Annual Report
      on Form 10-K for the fiscal year ended January 31, 1995, filed with the 
      Securities and Exchange Commission on April 29, 1995.

/6/   Incorporated by reference from National Home Centers, Inc. Quarterly
      Report on Form 10-Q for the period ended April 30, 1995, filed with the
      Securities and Exchange Commission on June 12, 1995.

/7/   Incorporated by reference from National Home Centers, Inc. Annual Report
      on Form 10-K for the period ending January 31, 1996, filed with the
      Securities and Exchange Commission on April 30, 1996.

/8/   Incorporated by reference from National Home Centers, Inc. Annual Report
      on Form 10-K for the period ending January 31, 1997, filed with the
      Securities and Exchange Commission on May 1, 1997.

/9/   Incorporated by reference from National Home Centers, Inc. Quarterly
      Report on Form 10-Q for the period ending July 31, 1998, filed with the
      Securities and Exchange Commission on September 15, 1998.

                                       13
<PAGE>
 
                                  SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       NATIONAL HOME CENTERS, INC.

          April 30, 1999          By:  /s/ DWAIN A. NEWMAN
                                       ----------------------------------------
                                       Dwain A. Newman
                                       Chairman of the Board and  Chief 
                                       Executive Officer



          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
 
          April 30, 1999          By:  /s/ DWAIN A. NEWMAN
                                       ----------------------------------------
                                       Dwain A. Newman
                                       Chairman of the Board and Chief 
                                       Executive Officer
 
          April 30, 1999          By:  /s/ DANNY R. FUNDERBURG
                                       ----------------------------------------
                                       Danny R. Funderburg
                                       President, Chief Operating Officer and 
                                       Director
 
          April 30, 1999          By:  /s/ ROGER A. HOLMAN
                                       ----------------------------------------
                                       Roger A. Holman
                                       Vice President, Purchasing Marketing and 
                                       Director
 
          April 30, 1999          By:  /s/ BRENT A. HANBY
                                       ----------------------------------------
                                       Brent A. Hanby
                                       Executive Vice President, Chief Financial
                                       Officer and Director
 
          April 30, 1999          By:  /s/ RICHARD D. DENISON
                                       ----------------------------------------
                                       Richard D. Denison
                                       Director
 
          April 30, 1999          By:  /s/ DAVID W. TRUETZEL
                                       ----------------------------------------
                                       David W. Truetzel
                                       Director

                                       14

<PAGE>
 
                               INDEX OF EXHIBITS



<TABLE>
<CAPTION>
     Exhibit No.                          Description
     -----------                          -----------
<S>                 <C>
     3.1            Amended and Restated Articles of Incorporation of the
                    Company./1/
                    
     3.2            Amended and Restated By-Laws of the Company./1/
                    
     4.1            Form of the Company's Common Stock Certificate./1/
                    
     4.2            Amended and Restated Articles of Incorporation of the
                    Company, Sections 5 through 7./1/
                    
     10.1           Life Insurance Policy, dated May 15, 1983, issued by
                    Executive Life Insurance Company on the life of Dwain A.
                    Newman, in the amount of $1,000,000 with the Company named
                    as beneficiary, including Assignment, dated September 10,
                    1992, to the Arkansas Teachers Retirement System./1/
                    
     10.2           Lease Agreement dated September 1, 1992 between Dwain A.
                    Newman and Glenda R. Newman and the Company for the
                    Springdale, Arkansas store./1/
                    
     10.3           Lease Agreement dated September 1, 1992 between Dwain A.
                    Newman and Glenda R. Newman and the Company for the North
                    Little Rock, Arkansas store./1/
                    
     10.4           Lease Agreement dated September 1, 1992 between Dwain A.
                    Newman and Glenda R. Newman and the Company for the Fort
                    Smith, Arkansas store./1/
                    
     10.5           Lease Agreement dated June 1, 1992 between Dwain A. Newman
                    and Glenda R. Newman and the Company for the Bentonville,
                    Arkansas store./1/
                    
     10.6           Lease Agreement dated July 1, 1993 between Parham
                    Properties, Inc. and the Company for the Little Rock,
                    Arkansas store./2/
                    
     10.7           Lease Agreements dated December 22, 1992 between Valley Park
                    Limited Partnership and the Company for the Russellville,
                    Arkansas store./1/
                    
     10.8           Subordination, Attornment and Non-Disturbance Agreement and
                    Estoppel Certificate dated September 10, 1992 between ATRS,
                    the Company, and Dwain A. Newman and Glenda R. Newman for
                    the Springdale, North Little Rock and Fort Smith Leases./1/
                    
     10.9           Form of the 1993 Employee Stock Purchase Plan of National
                    Home Centers, Inc./1/
                    
     10.10          Form of the Company's 1993 Incentive Compensation Plan./1/
                    
     10.11          Loan and Security Agreement dated December 29, 1992 between
                    the Company and MetLife Capital Corporation.

</TABLE> 

                                       15
<PAGE>
 
<TABLE>
<CAPTION>
     Exhibit No.                          Description
     -----------                          -----------
<S>                 <C>

     10.12          Note & Security Agreement dated 6/15/94 between the Company
                    and NationsBanc Leasing Corp./3/
                    
     10.13          Assignment of Policy dated 5/20/94 between the Company and
                    the Newman 1994 Family Trust./3/
                    
     10.14          Assignment of Policy dated 5/20/94 between the Company and
                    the Newman 1994 Family Trust./3/
                    
     10.15          Split Dollar Insurance Agreement dated 5/20/94 between the
                    Company and the Newman 1994 Family Trust./3/
                    
     10.16          Split Dollar Insurance Agreement dated 5/20/94 between the
                    Company and the Newman 1994 Family Trust./3/
                    
     10.17          Guaranty Agreement effective May 20, 1994./4/
                    
     10.18          Supplemental Security Agreement and Term Promissory Note No.
                    1 dated December 6, 1994 between the Company and MetLife
                    Capital Corporation./5/
                    
     10.19          Promissory Note and Mortgage dated May 5, 1995 to Simmons
                    First Bank of Arkansas for Conway, Arkansas Store./6/
                    
     10.20          Form of the Company's 401(k) Adoption Agreement with First
                    Tennessee National Bank as Trustee./7/
                    
     10.21          1996 Long-Term Performance Plan./8/
                    
     10.22          Loan and Security Agreement with NationsCredit Commercial
                    Funding./9/
                    
     10.23          Real Property Purchase Agreement between National Home
                    Centers, Inc. and Home Depot U.S.A., Inc./9/
                    
     10.24          Agreement to Sell and Purchase Real Estate between National
                    Home Centers, Inc. and Lowe's Home Centers, Inc./9/
                    
     11.1           Computation of Loss Per Share.
                    
     13.1           National Home Centers, Inc. 1998 Annual Report (only those
                    portions specifically incorporated herein by reference shall
                    be deemed filed with the Commission).
                    
     21.1           Subsidiaries of the Company./1/
                    
     27.1           Financial Data Schedule.
</TABLE>

                                       16