<PAGE>

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

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                                   Form 10-Q
(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
               For the quarterly period ended September 30, 2001
                                       OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
             For the quarterly period from __________ to __________

                       Commission file number 333-62635

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

                       CENTURY MAINTENANCE SUPPLY, INC.
            (Exact name of registrant as specified in its charter)

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

                Delaware                                   76-0542935
     (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                  Identification No.)

            10050 Cash Road, Suite 1                         77477
                 Stafford, Texas                           (Zip Code)
     (Address of Principal Executive Offices)

                                (281) 208-2600
             (Registrant's telephone number, including area code)

                                Not Applicable
  (Former name, former address and former fiscal year, if changed since last
                                   report).

     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 [_]

     The number of shares of Common Stock, $0.001 par value, outstanding (the
only class of common stock of the Company outstanding) was 12,170,498 on
November 12, 2001.

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

               CENTURY MAINTENANCE SUPPLY, INC. AND SUBSIDIARIES

                       Quarter Ended September 30, 2001

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Condensed Consolidated Financial Statements of Century Maintenance
          Supply, Inc. and Subsidiaries (Unaudited)

          Condensed Consolidated Balance Sheets as of December 31, 2000 and
          September 30, 2001...........................................................    2

          Condensed Consolidated Statements of Income for the Three Months and
          Nine Months Ended September 30, 2000 and September 30, 2001..................    4

          Condensed Consolidated Statement of Changes in Stockholders' Equity
          (Deficit) for the Nine Months Ended September 30, 2001.......................    5

          Condensed Consolidated Statements of Cash Flows for the Nine Months
          Ended September 30, 2000 and September 30, 2001..............................    6

          Notes to Condensed Consolidated Financial Statements (Unaudited).............    7

Item 2.   Management's Discussion and Analysis of Financial Condition and Results
          of Operations................................................................   11

Item 3.   Quantitative and Qualitative Disclosures About Market Risk...................   17

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings............................................................   18
Item 2.   Changes in Securities and Use of Proceeds....................................   18
Item 3.   Defaults Upon Senior Securities..............................................   18
Item 4.   Submission of Matters to a Vote of Security Holders..........................   18
Item 5.   Other Information............................................................   18
Item 6.   Exhibits and Reports on Form 8-K.............................................   18

SIGNATURE..............................................................................   19
</TABLE>

                                       1
<PAGE>

                         PART I  FINANCIAL INFORMATION

ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF CENTURY MAINTENANCE
                   SUPPLY, INC. AND SUBSIDIARIES (UNAUDITED)

               Century Maintenance Supply, Inc. and Subsidiaries

                     Condensed Consolidated Balance Sheets
                                (In thousands)

<TABLE>
<CAPTION>
                                                 December 31,   September 30,
                                                     2000           2001
                                                 ------------   -------------
                                                                 (Unaudited)
<S>                                              <C>            <C>
Assets
Current assets:
 Cash and cash equivalents.......................   $     4       $     2
 Trade accounts receivable, net..................    28,745        39,244
 Inventory, net..................................    37,482        37,923
 Deferred income taxes...........................       558           558
 Prepaid expenses and other current assets.......     5,292         6,312
                                                    -------       -------
Total current assets.............................    72,081        84,039
Goodwill, net....................................     6,175         6,002
Deferred financing costs.........................     2,028         1,441
Other assets.....................................       303           321

Property and equipment...........................     9,965        10,272
 Less accumulated depreciation...................    (5,666)       (6,482)
                                                    -------       -------
Net property and equipment.......................     4,298         3,790
Deferred income taxes............................       280           280
                                                    -------       -------
Total assets.....................................   $85,165       $95,873
                                                    =======       =======
</TABLE>

See accompanying notes.

                                  (continued)

                                       2
<PAGE>

               Century Maintenance Supply, Inc. and Subsidiaries

               Condensed Consolidated Balance Sheets (continued)
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                     December 31,        September 30,
                                                                        2000                 2001
                                                                     ------------        -------------
                                                                                          (Unaudited)
<S>                                                                  <C>                 <C>
Current liabilities:
  Accounts payable.................................................   $  14,117           $  14,668
  Revolving credit facility........................................       2,500               3,500
  Income taxes payable.............................................          13               4,615
  Accrued expenses.................................................       4,044               4,921
  Current portion of long-term debt................................      10,100              13,100
  Dividends payable................................................       3,075               1,762
                                                                      ---------           ---------
     Total current liabilities.....................................      33,849              42,566
Long-term debt, less current portion...............................      77,900              67,950

Redeemable exchangeable preferred stock, net $100 par value;
  2,000,000 shares authorized; 446,171 shares issued and
  outstanding at December 31, 2000 and 527,706 shares
  issued and outstanding at September 30, 2001.....................      44,509              51,013


Stockholders' equity (deficit):
  Common Stock, $0.001 par value; 15,000,000 shares
  authorized; 12,590,536 shares issued and outstanding at
  December 31, 2000 and September 30, 2001.........................          13                  13
     Additional paid-in capital....................................      71,176              71,176
     Treasury stock, at cost.......................................      (1,811)             (2,105)
     Accumulated deficit...........................................    (140,470)           (134,740)
     Accumulated other comprehensive income........................          --                  --
                                                                      ---------           ---------
Total stockholders' equity (deficit)...............................     (71,093)            (65,656)
                                                                      ---------           ---------
Total liabilities and stockholders' equity (deficit)...............   $  85,165           $  95,873
                                                                      =========           =========
</TABLE>

See accompanying notes.

                                       3
<PAGE>

               Century Maintenance Supply, Inc. and Subsidiaries

                  Condensed Consolidated Statements of Income
                                (In thousands)

<TABLE>
<CAPTION>
                                                    Three months                  Nine months
                                                 ended September 30,           ended September 30,
                                                 -------------------           -------------------
                                                   2000       2001               2000       2001
                                                 --------  ----------          --------  ----------
                                                    (Unaudited)                     (Unaudited)
<S>                                              <C>       <C>                 <C>        <C>
Net sales.......................................  $74,970   $80,038             $200,255   $215,283
Cost of goods sold..............................   54,165    58,640              144,657    156,940
                                                  -------   -------             --------   --------
Gross profit....................................   20,805    21,398               55,598     58,343
Selling, general, and administrative expenses...   10,679    11,735               30,844     34,278
                                                  -------   -------             --------   --------
Operating income................................   10,126     9,663               24,754     24,065
Interest expense................................    2,461     1,888                7,286      6,191
                                                  -------   -------             --------   --------
Income before income taxes......................    7,665     7,775               17,468     17,874
Provision for income taxes......................    3,065     3,023                6,798      6,953
                                                  -------   -------             --------   --------
Net income......................................    4,600     4,752               10,670     10,921
Other comprehensive income, net of tax..........       --       711                   --         --
                                                  -------   -------             --------   --------
Comprehensive Income............................  $ 4,600   $ 5,463             $ 10,670   $ 10,921
                                                  =======   =======             ========   ========
</TABLE>

See accompanying notes.

                                       4
<PAGE>

               Century Maintenance Supply, Inc. and Subsidiaries

 Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
                 For the Nine Months Ended September 30, 2001
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                                         Number of                                                           Accumulated
                                       Shares Issued                 Additional                                  Other
                                           and             Common      Paid-In      Treasury  Accumulated    Comprehensive
                                        Outstanding        Stock       Capital        Stock     Deficit      Income (Loss)
                                       -------------       -------   ----------     --------  -----------    --------------
<S>                                    <C>                 <C>       <C>            <C>       <C>            <C>
Balances at
  December 31, 2000...................  12,590,536            $13     $71,176        $(1,811)  $(140,470)         $  --
  Purchase of treasury
     stock at cost (unaudited)........          --             --          --           (294)         --             --
  Preferred dividends accrued
     (unaudited)......................          --             --          --             --      (5,192)            --
  Cumulative effect of change in
     accounting principle (unaudited).          --             --          --             --          --           (578)
  Unrealized net gain on cash flow
     hedges (unaudited)...............          --             --          --             --          --           (133)
  Reclassification adjustment
     into earnings....................          --             --          --             --          --            711
  Net income (unaudited)..............          --             --          --             --      10,921             --
                                        ----------            ---     -------        -------   ---------          -----

Balances at
  September 30, 2001
   (unaudited)........................  12,590,536            $13     $71,176        $(2,105)  $(134,740)         $  --
                                        ==========            ===     =======        =======   ==========         =====

<CAPTION>
                                           Total
                                         Stockholders'
                                       Equity (Deficit)
                                       ----------------
<S>                                    <C>
Balances at
  December 31, 2000...................  $(71,093)
  Purchase of treasury
     stock at cost (unaudited)........      (294)
  Preferred dividends accrued
     (unaudited)......................    (5,192)
  Cumulative effect of change in
   accounting principle (unaudited)...      (578)
  Unrealized net gain on cash
   flow hedges (unaudited)............      (133)
  Reclassification adjustment
     into earnings....................       711
  Net income (unaudited)..............    10,921
                                        --------

Balances at
  September 30, 2001
   (unaudited).......................   $(65,656)
                                        =========
</TABLE>

See accompanying notes.

                                       5
<PAGE>

               Century Maintenance Supply, Inc. and Subsidiaries

                Condensed Consolidated Statements of Cash Flows
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                    Nine months ended
                                                                                      September 30,
                                                                                    ------------------
                                                                                      2000      2001
                                                                                    --------  --------
                                                                                       (Unaudited)
<S>                                                                                 <C>       <C>
Operating activities:
  Net income.....................................................................    $ 10,670   $ 10,921
  Adjustments to reconcile net income to net cash used in operating activities:
    Depreciation and amortization................................................       1,042      1,474
    Provision for bad debts......................................................         548        616
  Changes in operating assets and liabilities net of effects of acquisitions:
    Accounts receivable..........................................................      10,591)   (11,115)
    Inventory....................................................................      (2,131)      (441)
    Prepaid expenses and other assets............................................      (1,727)      (700)
    Accounts payable.............................................................       6,388        551
    Accrued expenses.............................................................          36        878
    Income taxes payable.........................................................      (3,020)     4,602
                                                                                     --------   --------
       Net cash provided by operating activities.................................       1,215      6,786
Investing activities:
  Purchases of property and equipment............................................      (1,349)      (793)
Financing activities:
  Net borrowings under revolving line of credit..................................       5,000      1,000
  Repayments of long-term debt...................................................      (4,200)    (6,950)
  Issuance of common stock.......................................................         332         --
  Tax effect of common stock issued upon exercise of employee stock options......         465         --
  Repurchase of preferred stock..................................................      (3,907)        --
  Repurchase of common stock.....................................................        (586)       (45)
                                                                                     --------   --------
       Net cash used by financing activities.....................................      (2,896)    (5,995)
                                                                                     --------   --------
Net decrease in cash.............................................................      (3,030)        (2)
Cash and cash equivalents at beginning of period.................................       3,499          4
                                                                                     --------   --------
Cash and cash equivalents at end of period.......................................    $    469   $      2
                                                                                     ========   ========
</TABLE>

See accompanying notes.

                                       6
<PAGE>

               Century Maintenance Supply, Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

1.   Basis of Presentation

     Century Maintenance Supply, Inc. and subsidiaries (collectively, the
"Company") distribute general maintenance supplies and air conditioning and
heating equipment and parts to apartment complexes throughout the United States.

     The condensed consolidated financial statements include the accounts of
Century Maintenance Supply, Inc. and its wholly owned subsidiaries. Intercompany
accounts and transactions have been eliminated in consolidation.

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the condensed consolidated financial statements and accompanying notes.  Actual
results could differ from those estimates.

     The condensed consolidated balance sheet at December 31, 2000 has been
derived from the audited financial statements at that date but does not include
all of the information or footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. The
Company's condensed consolidated balance sheet at September 30, 2001 and the
condensed consolidated statements of income, changes in stockholders' equity
(deficit), and cash flows for the interim periods ended September 30, 2000 and
2001 have been prepared by the Company without audit. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the consolidated financial position, results of
operations and cash flows have been made. The results of operations for the
interim periods are not necessarily indicative of the operating results for a
full year or of future operations.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. The accompanying
condensed consolidated financial statements should be read in conjunction with
the Company's audited consolidated financial statements for the year ended
December 31, 2000.

2.   Recapitalization

     Effective July 8, 1998, the Company completed a recapitalization of the
company pursuant to an agreement and plan of merger ("Recapitalization"). The
transaction occurred as follows:

     .    FS Equity Partners IV, L.P. ("FSEP IV"), formed Century Acquisition
          Corporation, a Delaware corporation ("Acquisition Co.") on April 21,
          1998.

     .    FSEP IV made an equity contribution of $67,451,190 to Acquisition Co.
          and two other investors contributed a total of $875,000 to Acquisition
          Co. (the "Equity Investment"). All of the outstanding capital stock of
          Acquisition Co. was held by FSEP IV and such other investors.

     .    The Company issued $40,000,000 of Senior Exchangeable PIK Preferred
          Stock (the "Preferred Stock"), $12,000,000 of which was purchased by
          affiliated parties.

     .    The Company obtained new secured term loan facilities with an
          aggregate principal amount of $100,000,000 (see Note 6).

     .    Acquisition Co. was merged into the Company (with the Company as the
          surviving corporation) and Acquisition Co.'s outstanding capital stock
          was converted into 2,969,820 newly issued shares of the Company.

                                       7
<PAGE>

     .    Pursuant to the merger, the Company applied the proceeds of the Equity
          Investment of $68,326,190, proceeds of the secured term loan
          facilities of $100,000,000 and the proceeds of the Preferred Stock of
          $40,000,000 to convert 7,561,355 shares of the Company held by the
          primary shareholder (Dennis C. Bearden) and the Management Owners
          (certain management employees of the Company) (collectively, the
          "Continuing Shareholders") and 236,950 options into cash of
          approximately $178,300,000, and paid certain costs and expenses
          associated with the Recapitalization which totaled approximately
          $14,280,000. Of the approximately $14,280,000 of costs and expenses,
          approximately $8,702,000 was expensed through September 30, 1998 and
          the remainder, which related to the Preferred Stock and the credit
          facility, was offset against proceeds or capitalized as deferred
          financing costs (see below). The purchase of the options to purchase
          shares of common stock from employees resulted in a compensation
          charge of approximately $4,092,000.

3.   Income Taxes

     The Company follows the asset and liability method of accounting for income
taxes. Under this method, deferred income tax assets and liabilities are
determined based on differences between the financial statement basis and income
tax basis of assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse.

     The Company's interim provisions for income taxes were computed using its
estimated effective tax rate for the year.

4.   Stockholders' Equity

     Effective January 14, 2000, the Company repurchased 97,727 shares of common
stock from a stockholder for $586,362.  Effective April 1, 2001, the Company
repurchased 31,013 shares of common stock from certain employee stockholders for
$248,104.  These shares of common stock were repurchased by the Company in lieu
of repayment by such stockholders of outstanding amounts owed to the Company
pursuant to short term loans issued to such stockholders in connection with the
exercise of options by them in July of 2000. Effective July 13, 2001, the
Company repurchased 7,517 shares of common stock from a stockholder for $45,102.
These shares have been placed in treasury.

     On July 1, 2000, certain employees exercised options issued by the Company
on July 1, 1997, to purchase 147,389 shares of common stock, with an exercise
price of $1.74 per share.  Richard Penick exercised options to purchase 34,510
shares of common stock and received a loan from the Company in the amount of
$60,047 to pay the exercise price for the options.  The loan was paid in full on
April 1, 2001.

     In connection with the Recapitalization, the Company adopted the 1998
Nonqualified Stock Option Plan, pursuant to which options may be granted to
eligible employees of the Company for the purchase of an aggregate of 1,642,500
shares of common stock of the Company. The 1998 Nonqualified Stock Option Plan
is administered by the Board of Directors (the "Board"). On July 9, 1998, the
Company granted 692,000 non-qualified stock options to purchase common stock
with an exercise price of $10.00 per common share with an expiration date of
seven years after the date of grant. The stock options granted become
exercisable over a four-year period based on the Company meeting certain
financial goals each year or on a cumulative basis over the four-year period as
set forth in the stock option agreement.

     In connection with the Recapitalization, the Company granted to a new
director of the Company 50,000 non-qualified stock options to purchase common
stock of the Company. The stock options have an exercise price of $10.00 per
common share with an expiration of seven years after the grant date and are
fully vested and exercisable.

     In connection with the Recapitalization, the Company granted a primary
shareholder 180,000 non-qualified stock options to purchase common stock of the
Company with an exercise price of $10.00 per common share with an expiration of
seven years after the grant date. The stock options become exercisable over a
three-year period based on the Company meeting certain financial goals each year
or on a cumulative basis over the three-year period as set forth in the stock
option agreement.

                                       8
<PAGE>

     On June 15, 2000, the Company granted non-qualified options to purchase
90,450 shares of common stock of the Company at an exercise price of $10.00 per
share with an expiration date of seven years after the date of grant.  The stock
options granted vest over a three year period, with the first vesting date
occurring on July 9, 2000 and all options vesting in full on July 9, 2002.

5.   Preferred Stock

     As part of the Recapitalization the Company sold $40.0 million of 13 1/4%
Senior Exchangeable PIK (Payment-in-kind) Preferred Stock of which $12.0 million
was sold to affiliates of the Company. The preferred stock is due in 2010 with
an aggregate liquidation preference of $40.0 million or $100 per share.
Dividends are payable semi-annually in cash, except that on each dividend
payment date on or prior to July 1, 2003, dividends may be paid, at the
Company's option, by issuance of additional shares of preferred stock. The
Company's credit facility currently prohibits the payment of cash dividends on
the preferred stock.  The preferred stock is subject to mandatory redemption at
its liquidation preference, plus accumulated and unpaid dividends, on July 1,
2010. The Company may redeem the preferred stock in accordance with certain
redemption provisions at a date earlier than July 1, 2010. If the Company elects
to redeem the preferred stock on or before July 1, 2003 the redemption price
will be 113.25% of the liquidation preference price of $100 per share.  Holders
of preferred stock have no voting rights.  Since January 1, 1999, the Company
has issued 212,074 shares of additional preferred stock as payment-in-kind for
dividends on the Company's existing preferred stock.

     At any time, the Company may, at its option, exchange all of the shares of
preferred stock then outstanding for exchange debentures in a principal amount
equal to the liquidation preference of the shares being exchanged. The exchange
debentures would have interest of 13 1/4% and would be due in 2010.  The
Company's credit facility currently prohibits the Company from exchanging the
preferred stock. The Company incurred $2,803,000 of costs as part of the sale of
the preferred stock which has been offset against the proceeds.  For the nine
months ended September 30, 2001, the Company has accreted $150,307 to retained
earnings as part of dividends accrued.

     In September 2000, the Company repurchased 51,573 shares of its redeemable
exchangeable preferred stock for $3,906,655.

6.   Credit Facility

     On July 8, 1998, as part of the Recapitalization, the Company entered into
a credit facility, providing for $100.0 million of secured term loan facilities
and a $25.0 million revolving loan facility (the "Revolving Credit Facility").
The term loan facility consists of a $40.0 million Tranche A Term Facility and a
$60.0 million Tranche B Term Facility (collectively called the "Term Loan
Facility"). The Term Loan Facility will amortize over a five-year period for the
Tranche A Term Facility and a seven-year period for the Tranche B Term Facility,
and the Revolving Credit Facility will mature on July 8, 2003.  The interest
rate under the Credit Facility is variable and based, at the option of the
Company, upon either a Eurodollar rate plus 2.5% (for the Revolving Credit
Facility and the Tranche A Term Facility) and 2.75% (for the Tranche B Term
Facility) per annum or a base rate plus 1.5% (for the Revolving Credit Facility
and the Tranche A Term Facility) and 1.75% (for the Tranche B Term Facility) per
annum.  If the Company achieves certain performance goals, rates under the
Tranche A Term Facility and the Revolving Credit Facility will be reduced. A
commitment fee of 0.5% per annum will be charged on the unused portion of the
new Revolving Credit Facility.

     The credit facility contains certain non-financial and financial covenants.
The Company incurred $4,552,000 of costs as part of obtaining the credit
facility which have been recorded as deferred financing costs. The Company
amortizes the costs over the average life of the credit facility.  For the nine-
month period ended September 30, 2001 the Company recognized amortization
expense of $586,741.  The Company is in compliance, as of November 12, 2001,
with the provisions of the Credit Facility.

     Effective September 30, 1998, the Company entered into two three-year
interest rate swap agreements to reduce a portion of its interest rate exposure
on its credit facility.  Under the terms of the first agreement, the Company
pays 8.81% on notional principal of $29,925,000 and receives LIBOR plus 2.75% on
the notional balance.  Under the terms of the second agreement, the Company pays
8.54% on a notional balance of $20,000,000,

                                       9
<PAGE>

which declines to $13,000,000 in 2001, and receives LIBOR plus 2.5% on the
notional balance. These interest rate swap agreements terminated on September
28, 2001.

7.   Derivative Instruments and Hedging Activities

     The Company is exposed to variability of future cash flows related to
interest rate risk on its existing long-term debt and has entered into interest
rate swap agreements to hedge their exposure which terminated on September 28,
2001.

     The Company adopted Statement of Financial Accounting Standard ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities," on January
1, 2001.  SFAS No. 133 requires that all derivatives be recognized as either
assets or liabilities and measured at fair value, and changes in the fair value
of derivatives are reported in current earnings, unless the derivative is
designated and effective as a hedge.  If the intended use of the derivative is
to hedge the exposure to changes in the fair value of an asset, a liability or a
firm commitment, then changes in the fair value of the derivative instrument
will generally be offset in the income statement by changes in the hedged item's
fair value.  However, if the intended use of the derivative is to hedge the
exposure to variability in expected future cash flows, then changes in the fair
value of the derivative instrument will generally be reported in Other
Comprehensive Income ("OCI").  The gains and losses on the derivative instrument
that are reported in OCI will be reclassified in earnings in the periods in
which earnings are impacted by the hedged item.

     There was no impact on the Company's results of operations from the January
1, 2001 implementation of SFAS No. 133.  The net of tax cumulative-effect
adjustment reducing OCI and stockholders' equity was approximately $578,000 on
January 1, 2001.  For the three and nine months ended September 30, 2001, the
Company recorded an unrealized net of tax gain on these cash flow hedges of
approximately $711,000 and $578,000, respectively.

     For the nine months ended September 30, 2001, the ineffective portion of
these cash flow hedges were not material.

                                       10
<PAGE>

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

     The following discussion of Century Maintenance Supply, Inc. and its
subsidiaries' (collectively, the "Company" or "Century") condensed consolidated
historical results of operations and financial condition should be read in
conjunction with the condensed consolidated financial statements of the Company
and the notes thereto included elsewhere in this Form 10-Q.

Forward Looking Statements

     This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995.  All statements other
than statements of historical fact included in this Report, including without
limitation, certain statements under this Item 2 and the Company's condensed
financial statements and notes thereto contained elsewhere in this Report
regarding the Company's financial position, business strategy, prospects and
other related matters may constitute such forward-looking statements.  Although
the Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct.  Actual results could differ materially from the Company's
expectations as a result of a number of factors, including without limitation
those set forth below and those located elsewhere in this Report and in the
Company's Registration Statement on Form S-4, as amended, effective January 21,
1999 (File Number 333-62635).

General

     Century has grown through a combination of increasing sales at its existing
distribution centers, by opening new distribution centers and through the
acquisitions of Nationwide Apartment Supply, Inc. in July 1997 (the "Nationwide
Acquisition") and Champion Blind and Drapery, Inc. in April 1999 (the "Champion
Acquisition").  As part of its strategy of expanding into new geographic
markets, the Company opened 22 new distribution centers from 1994 through the
quarter ended September 30, 2001.  Historically, a typical center breaks even
within three years of opening, and operating margins continue to improve as the
center's revenue grows.  The Nationwide Acquisition added 11 distribution
centers principally in the Midwestern United States, three of which were
consolidated into existing Century centers.

The Recapitalization

     On July 8, 1998, the Company completed a recapitalization (the
"Recapitalization") pursuant to which affiliates of Freeman Spogli & Co. LLC
("FS&Co.") invested $67.5 million, a director of the Company invested $750,000,
and a third party, The Parthenon Group, invested $125,000, in cash for common
stock of the Company (the "Common Stock Investment") and certain existing
stockholders of the Company (the "Continuing Stockholders") retained common
stock with a value of $54.2 million (based on the valuation of the Company used
in the Recapitalization).  As part of the Recapitalization, shares of Series A
13 1/4% Senior Exchangeable PIK Preferred Stock due 2010 of the Company (the
"Initial Preferred Stock")  with an aggregate liquidation preference of $28.0
million were sold in a private placement to institutional investors.  In
addition, shares of Series B 13 1/4% Senior Exchangeable Preferred Stock of the
Company with an aggregate liquidation preference of $12.0 million were sold to
FS&Co. and Dennis C. Bearden, the Company's Chief Executive Officer, in a
private placement that was consummated simultaneously with the sale of the
Initial Preferred Stock (the "Private Placement" and, together with the sale of
the Initial Preferred Stock, the "Sales of Preferred").  Immediately following
consummation of the Recapitalization, FS&Co. and the Continuing Stockholders
beneficially owned approximately 55.1% and 44.2% of the outstanding common stock
of the Company, respectively, and FS&Co. and Mr. Bearden beneficially owned
10.0% and 20.0% respectively of the outstanding preferred stock of the Company.

     On July 8, 1998, the Company entered into a credit agreement (the "Credit
Facility") providing for a $100.0 million secured term loan facility (the "Term
Loan Facility"), which was funded in connection with the consummation of the
Recapitalization, and a $25.0 million revolving loan facility (the "Revolving
Credit Facility"). The Revolving Credit Facility will be available to the
Company and its subsidiaries (i) for future working capital and general
corporate purposes, (ii) to finance certain permitted acquisitions, and (iii)
for issuing commercial and standby letters of credit.

                                       11
<PAGE>

     The sale of the Initial Preferred Stock and the Private Placement and the
application of the net proceeds from each, the payments to the Continuing
Stockholders and to option holders under the Recapitalization Agreement, the
Common Stock Investment and the related borrowings under the Credit Facility are
collectively referred to herein as the "Recapitalization."

     On February 19, 1999, the Initial Preferred Stock was exchanged for
Century's Series C 13 1/4% Senior Exchangeable PIK Preferred Stock (the
"Exchange Preferred Stock"), which was registered under the Securities Act
pursuant to Century's Registration Statement on Form S-4, as amended, effective
January 21, 1999 (File Number 333-62635).

Results of Operations

     The following tables set forth, for the periods indicated, certain income
and expense items expressed in dollars and as a percentage of the Company's net
sales.

<TABLE>
<CAPTION>
                                                        Three Months Ended                         Nine Months Ended
                                                            (unaudited)                                (unaudited)
                                                 ---------------------------------       ---------------------------------
                                                 September 30,       September 30,       September 30,       September 30,
                                                     2000                2001                2000                 2001
                                                 -------------       -------------       -------------        ------------
                                                       (dollars in thousands)                  (dollars in thousands)
<S>                                              <C>                 <C>                 <C>                 <C>
Net sales.......................................     $74,970             $80,038             $200,255            $215,283
Cost of goods sold..............................      54,165              58,640              144,657             156,940
                                                     -------             -------             --------            --------
Gross profit....................................      20,805              21,398               55,598              58,343
Selling, general and administrative expenses....      10,679              11,735               30,844              34,278
                                                     -------             -------             --------            --------
Operating income................................      10,126               9,663               24,754              24,065
Interest expense................................       2,461               1,888                7,286               6,191
                                                     -------             -------             --------            --------
Income before income taxes......................       7,665               7,775               17,468              17,874
Provision for income taxes......................       3,065               3,023                6,798               6,953
                                                     -------             -------             --------            --------
Net income......................................     $ 4,600             $ 4,752             $ 10,670            $ 10,921
                                                     =======             =======             ========            ========

<CAPTION>
                                                         Three Months Ended                      Nine Months Ended
                                                             (unaudited)                             (unaudited)
                                                 ---------------------------------       ---------------------------------
                                                 September 30,       September 30,        September 30,      September 30,
                                                     2000                2001                2000                2001
                                                 -------------       -------------       --------------      -------------
<S>                                              <C>                 <C>                 <C>                 <C>
Net sales.......................................      100.0%               100.0%              100.0%             100.0%
Cost of goods sold..............................       72.2                 73.3                72.2               72.9
                                                      -----                -----               -----              -----
Gross profit....................................       27.8                 26.7                27.8               27.1
Selling, general and administrative expenses....       14.3                 14.7                15.4               15.9
                                                      -----                -----               -----              -----
Operating income................................       13.5                 12.1                12.4               11.2
Interest expense................................        3.3                  2.4                 3.7                2.9
                                                      -----                -----               -----              -----
Income before income taxes......................       10.2                  9.7                 8.7                8.3
Provision for income taxes......................        4.1                  3.8                 3.4                3.2
                                                      -----                -----               -----              -----
Net income......................................        6.1%                 5.9%                5.3%               5.1%
                                                      =====                =====               =====              =====
</TABLE>

                                       12
<PAGE>

Three Months Ended September 30, 2001 Compared to Three Months Ended September
30, 2000

     Net sales for the three months ended September 30, 2001 were $80.0 million,
an increase of $5.1 million or 6.8% over the three months ended September 30,
2000.  This increase in net sales was primarily due to comparable center growth
of 6.3% and the opening of a new distribution center in Salt Lake City. The
growth, however, was affected by the mild weather in the midwest states and one
less business day over the quarter ended September 30, 2000.

     The Company's gross profit for the three months ended September 30, 2001
was $21.4 million, an increase of $0.6 million or 2.9% over the quarter ended
September 30, 2000 primarily due to the increase in net sales discussed above.
As a percentage of net sales, the Company's gross profit decreased to 26.7% for
the quarter ended September 30, 2001 from 27.8% for the quarter ended September
30, 2000.  This decrease was primarily due to a slight reduction in average
selling price of the Company's products and higher freight costs related to an
increase in sales of certain product lines.

     Selling, general and administrative expense, consisting primarily of
payroll, occupancy and vehicle expenses, totaled $11.7 million for the quarter
ended September 30, 2001, an increase of $1.1 million or 9.9% over the quarter
ended September 30, 2000.  As a percentage of net sales, selling, general and
administrative expense increased to 14.7% for the three months ended September
30, 2001 from 14.3% in the quarter ended September 30, 2000.  This increase was
primarily attributable to the opening of a new distribution center and an
overall increase in payroll related expenses.

     Interest expense for the three months ended September 30, 2001 was $1.9
million, a decrease of $0.6 million or 23.3% from the quarter ended September
30, 2000, primarily due to a decrease in market interest rates and average
outstanding balance owed on the Company's credit facility.

Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30,
2000

     Net sales for the nine months ended September 30, 2001 were $215.3 million,
an increase of $15.0 million or 7.5% over the nine months ended September 30,
2000.  This increase in net sales was primarily due to comparable center growth
of 7.1% and the opening of a new distribution center in Salt Lake City.

     The Company's gross profit for the nine months ended September 30, 2001 was
$58.3 million, an increase of $2.7 million or 4.9% over the nine months ended
September 30, 2000 primarily due to the increase in net sales discussed above.
As a percentage of net sales, the Company's gross profit decreased to 27.1% for
the nine months ended September 30, 2001 from 27.8% for the nine months ended
September 30, 2000.  This decrease was primarily due to a slight reduction in
average selling price of the Company's products and higher freight costs related
to an increase in sales of certain product lines.

     Selling, general and administrative expense, consisting primarily of
payroll, occupancy and vehicle expenses, totaled $34.3 million for the nine
months ended September 30, 2001, an increase of $3.4 million or 11.1% over the
nine months ended September 30, 2000.  As a percentage of net sales, selling,
general and administrative expense increased to 15.9% for the nine months ended
September 30, 2001 from 15.4% in the nine months ended September 30, 2000.  This
increase was primarily attributable to the opening of a new distribution center,
expansion of the blind business and an overall increase in payroll related
expenses.

     Interest expense for the nine months ended September 30, 2001 was $6.2
million, a decrease of $1.1 million or 15.0% from the nine months ended
September 30, 2000, primarily due to a decrease in market interest rates and
average outstanding balance owed on the Company's credit facility.

Liquidity and Capital Resources

     The Company's primary capital requirements have been the funding of its
continued distribution center expansion program, inventory requirements and the
development and implementation of customized information systems.  From 1996 to
the quarter ended September 30, 2001 the Company opened 22 new distribution
centers. The Company has financed its growth through a combination of internally
generated funds and borrowings.

                                       13
<PAGE>

     In the first nine months of 2001, net cash provided by operating activities
was $6.8 million, increasing from $1.2 million of net cash used in the first
nine months of 2000.  Net cash used by investing activities in the first nine
months of 2001 was $0.8 million, decreasing from $1.3 million of net cash used
in the first nine months of 2000 and was due to a decrease in capital
expenditures.  Net cash used by financing activities in the first nine months of
2001 was $6.0 million, increasing from net cash used of $2.9 million in the
first nine months of 2000 primarily due to the repayments of long term debt.

     The Company currently anticipates that its capital expenditures, excluding
potential acquisitions, for 2001 and 2002 will be approximately $2.0 million in
each year.  Inventories were $37.9 million as of September 30, 2001 and $37.5
million at December 31, 2000.  In order to meet the needs of its customers, the
Company must maintain inventories sufficient to permit same day or next day
filling of most orders.  The Company anticipates that its inventory levels will
continue to increase primarily to support higher sales volumes and new center
openings.  Trade accounts receivable, net of allowances were $39.2 million at
September 30, 2001 and $28.7 million at December 31, 2000.  The Company
generally offers 30-day credit terms to its customers.  The Company's working
capital requirements are typically higher in the second and third quarters to
meet seasonal demand.  This is due primarily to the fact that more people move
during the summer months when school is out, causing apartment managers to
purchase more supplies to make apartments ready for new occupants.  Also, hot
summer months translate into a higher volume of HVAC sales due to the need for
air conditioning parts.

     The Company has outstanding indebtedness consisting of borrowings of $81.05
million under the Term Loan Facility.  The Company has access to a total of
$25.0 million through the Revolving Credit Facility.  As of November 12, 2001,
the Company had $2.5 million of outstanding borrowings under the Revolving
Credit Facility.  The Tranche A Term Facility will mature on July 8, 2003 and
the Tranche B Term Facility will mature on July 8, 2005.  Annual required
principal payments on the Term Loan Facility are $3.2 million, $13.6 million,
$18.8 million, $28.5 million and $17.0 million over the next five years.  The
Revolving Credit Facility will mature on July 8, 2003. The interest rate under
the Credit Facility is variable and based, at the option of the Company, upon
either a Eurodollar rate plus 2.5% (for the Revolving Credit Facility and the
Tranche A Term Facility) and 2.75% (for the Tranche B Term Facility) per annum
or a base rate plus 1.5% (for the Revolving Credit Facility and the Tranche A
Term Facility) and 1.75% (for the Tranche B Term Facility) per annum.  Pursuant
to the terms of the Credit Facility, because the Company achieved certain
performance goals, rates under the Tranche A Term Facility and the Revolving
Credit Facility have been reduced in increments as agreed.  The Company also
covenanted to enter into specified interest rate protection arrangements,
including interest rate swaps, to reduce the Company's exposure to fluctuations
in the rates of interest payable under the Credit Facility for the first three
years.  In mid-July 1998, the Company entered into such interest rate swap
transactions with respect to $50.0 million of borrowings under the Term Loan
Facility, which became effective September 30, 1998 and expired on September 28,
2001.  At November 12, 2001 the interest rate for the Revolving Credit Facility
was 6.25%, the Tranche A Facility was between 4.875% and 5.75% and the Tranche B
Facility was between 5.375% and 6.25%.   A commitment fee of 0.4375% per annum
will be charged on the unused portion of the Credit Facility.  The loans under
the Credit Facility are secured by a first priority security interest in
substantially all tangible and intangible assets of the Company and its
subsidiaries (including the capital stock of the subsidiaries).

     Borrowings under the Credit Facility are required to be prepaid with (a)
75% (or 50% upon satisfaction of a debt to adjusted EBITDA ratio) of the
Company's Excess Cash Flow, (b) 100% of the net proceeds of issuances of debt
obligations of the Company and its subsidiaries, (c) 100% of the net cash
proceeds from asset dispositions of the Company and its subsidiaries, (d) 50% of
the net proceeds of issuances of equity of the Company and its subsidiaries,
except that if an equity issuance occurs other than as part of a Public Equity
Offering (as defined) of the Company's common stock, then 100% of the net
proceeds of such offering are required to be applied to prepay the Credit
Facility, and (e) 100% of the net proceeds from insurance recoveries over $1.0
million and condemnations, after application of such insurance recoveries or
condemnation proceeds to repair the property involved.  "Excess Cash Flow," for
any period, means EBITDA (as defined) for such period, less the sum of (a)(i)
permitted capital expenditures, (ii) taxes, (iii) consolidated interest expense,
(iv) increases in Adjusted Working Capital (as defined) for such period, (v)
scheduled and mandatory payments of debts, (vi) voluntary prepayments of the
Term Loan Facility, (vii) payments in connection with purchases of the Company's
Capital Stock, (viii) cash consideration paid for certain permitted acquisitions
(but excluding cash consideration funded by a borrowing under the Revolving
Credit Facility), and (ix) cash dividends paid on the Exchange Preferred Stock
to

                                       14
<PAGE>

the extent permitted by the Credit Facility, plus the sum of: (b)(i) decreases
in adjusted working capital for such period, (ii) refunds of taxes paid in prior
periods, and (iii) proceeds of certain indebtedness.

     The Credit Facility contains covenants restricting the ability of the
Company and the Company's subsidiaries to, among other things, (i) incur
additional debt, (ii) declare dividends or redeem or repurchase capital stock,
(iii) prepay, redeem or purchase debt, (iv) incur liens, (v) make loans and
investments, (vi) make capital expenditures, (vii) engage in mergers,
acquisitions and asset sales and (viii) engage in transactions with affiliates.
The Company is also required to comply with financial covenants with respect to
(a) limits on annual aggregate capital expenditures, (b) a fixed charge coverage
ratio, (c) a maximum leverage ratio, (d) a minimum EBITDA and (e) an interest
coverage ratio.  The Company is in compliance, as of November 12, 2001, with the
provisions of the Credit Facility.

     In connection with the Recapitalization, the Company issued 280,000 shares
of its Initial Preferred Stock with an aggregate liquidation preference of $28.0
million, and 120,000 shares of preferred stock pursuant to the Private
Placement, with an aggregate liquidation preference of $12.0 million.  On
February 19, 1999, the Initial Preferred Stock was exchanged for the Company's
Series C 13 1/4% Senior Exchangeable PIK Preferred Stock due 2010 which has been
registered under the Securities Act pursuant to the Company's Registration
Statement on Form S-4, as amended, effective January 21, 1999 (File Number 333-
62635).  At the election of the Company, dividends on the Exchange Preferred
Stock may be paid in kind until July 1, 2003 and thereafter must be paid in
cash.  Since January 1, 1999, the Company has issued 212,074 shares of
additional preferred stock as payment-in-kind for dividends on the Exchange
Preferred Stock.  The Credit Facility currently prohibits the payment of cash
dividends on the Exchange Preferred Stock.  The Exchange Preferred Stock is
mandatorily redeemable upon a change of control and on July 1, 2010. In
September 2000, the Company repurchased 51,573 shares of its redeemable
exchangeable preferred stock for $3,906,655.

     The Company is a holding company and relies on dividends and other
distributions from its subsidiaries as its primary source of liquidity.  The
Company does not have and in the future may not have any assets other than the
capital stock of its subsidiaries.  The ability of subsidiaries of the Company
to make payments to the Company when required may be restricted by law and
restricted or prohibited under the terms of the Credit Facility and future
indebtedness of the Company.  No assurance can be made that subsidiaries of the
Company will be able to pay cash dividends or make other distributions to the
Company.

     The Company believes that, based on current levels of operations and
anticipated growth, its cash from operations, together with other available
sources of liquidity, including borrowings under the Revolving Credit Facility,
will be sufficient to fund its debt service obligations and implement its growth
strategy over the next 12 months.

New Accounting Standards

     The Company is exposed to variability of future cash flows related to
interest rate risk on its existing long-term debt and has entered into interest
rate swap agreements to hedge their exposure.  These interest rate swap
agreements terminated on September 28, 2001.

     The Company adopted Statement of Financial Accounting Standard ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities," on January
1, 2001.  SFAS No. 133 requires that all derivatives be recognized as either
assets or liabilities and measured at fair value, and changes in the fair value
of derivatives are reported in current earnings, unless the derivative is
designated and effective as a hedge.  If the intended use of the derivative is
to hedge the exposure to changes in the fair value of an asset, a liability or a
firm commitment, then changes in the fair value of the derivative instrument
will generally be offset in the income statement by changes in the hedged items
fair value.  However, if the intended use of the derivative is to hedge the
exposure to variability in expected future cash flows, then changes in the fair
value of the derivative instrument will generally be reported in Other
Comprehensive Income ("OCI").  The gains and losses on the derivative instrument
that are reported in OCI will be reclassified in earnings in the periods in
which earnings are impacted by the hedged item.

     There was no impact on the Company's results of operations from the January
1, 2001 implementation of SFAS No. 133.  The net of tax cumulative-effect
adjustment reducing OCI and stockholders' equity was

                                       15
<PAGE>

approximately $578,000 on January 1, 2001. For the three and nine months ended
September 30, 2001, the Company recorded unrealized net of tax gain on these
cash flow hedges of approximately $711,000 and $578,000, respectively. For the
nine months ended September 30, 2001, the ineffective portion of these cash flow
hedges were not material.

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets."  SFAS No. 141 establishes
new standards for accounting and reporting requirements for business
combinations and requires the purchase method of accounting be used for all
business combinations initiated after June 30, 2001.  Use of the pooling-of-
interests method is prohibited.  SFAS No. 142, "Goodwill and Other Intangible
Assets," supersedes APB Opinion No. 17, "Intangible Assets."  SFAS No. 142
establishes new standards for goodwill acquired in a business combination and
eliminates amortization of goodwill and instead sets forth methods to
periodically evaluate goodwill for impairment.  The Company expects to adopt
this statement during the first quarter of 2002.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."  SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
The Company expects to adopt this statement during the first quarter of 2002.

                                       16
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in the Company's market risk exposure
from that reported in the Company's 10-K for the fiscal year ended December 31,
2000.

                                       17
<PAGE>

                          PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     None.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     None.

ITEM 5.   OTHER INFORMATION

     None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          None.

     (b)  Reports on Form 8-K

          None.

                                       18
<PAGE>

                                   SIGNATURE

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


                                  CENTURY MAINTENANCE SUPPLY, INC.,
                                  a Delaware corporation

November 12, 2001                 By: /s/ Richard E. Penick
                                     ----------------------------------------
                                     Richard E. Penick
                                     Chief Financial Officer, Vice President
                                     and Assistant Secretary (Duly Authorized
                                     Officer and Principal Financial Officer)

                                       19