UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    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 24, 2004

                                       OR


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

          FOR THE TRANSITION PERIOD FROM _______________  TO _______________
          COMMISSION FILE NUMBER 333-106801


                             INTERLINE BRANDS, INC.
             (Exact name of registrant as specified in its charter)


                   NEW JERSEY                                  22-2232386
       (State or other jurisdiction of                     (I.R.S. Employer
        incorporation or organization)                    Identification No.)


  801 WEST BAY STREET, JACKSONVILLE, FLORIDA                      32204
   (Address of principal executive offices)                    (Zip Code)


                                 (904) 421-1400
              (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    [_]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

                        Yes   [_]         No    [X]

         As of the close of business on November 8, 2004, there were 5,399,736
shares outstanding of the registrant's common stock, no par value.

<PAGE>

<TABLE>
<CAPTION>

                                         TABLE OF CONTENTS

                                                                                                PAGE

                                    PART I -- FINANCIAL INFORMATION

<S>        <C>                                                                                  <C>
Item 1.    Financial Statements
                Unaudited Condensed Consolidated Balance Sheets as of  September 24, 2004
                         and December 26, 2003...................................................1
                Unaudited Condensed Consolidated Statements of Operations
                for the Three Months and Nine Months Ended September 24, 2004 and
                         September 26, 2003......................................................2
                Unaudited Condensed Consolidated Statement of Stockholders'
                Equity (Deficiency) for the Nine Months Ended September 24, 2004.................3
                Unaudited Condensed Consolidated Statements of Cash Flows
                for the Nine Months Ended September 24, 2004 and September 26, 2003..............4
                Notes to Unaudited Condensed Consolidated Financial
                Statements.......................................................................5
Item 2.    Management's Discussions and Analysis of Financial Condition
           and Results of Operations............................................................18
Item 3.    Quantitative and Qualitative Disclosures about Market Risk...........................24
Item 4.    Controls and Procedures..............................................................25

                                      PART II -- OTHER INFORMATION

Item 1.    Legal Proceedings....................................................................25
Item 5.    Other Information....................................................................26
Item 6.    Exhibits.............................................................................26

SIGNATURES......................................................................................27
</TABLE>



                                       ii
<PAGE>

                         PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
          AS OF SEPTEMBER 24, 2004 AND DECEMBER 26, 2003 (In thousands,
                        except share and per share data)

<TABLE>
<CAPTION>
                                                                      SEPTEMBER 24,   DECEMBER 26,
                                                                           2004            2003
                                                                      ------------    -----------
<S>                                                                   <C>             <C>
ASSETS

CURRENT ASSETS:
       Cash and cash equivalents                                      $   4,494       $   1,612
       Cash - restricted                                                  1,001           1,000
       Accounts receivable - trade (net of allowance for
         doubtful accounts of $6,731 and $6,316)                        107,792          83,684
       Accounts receivable - other                                       11,497          12,932
       Inventory                                                        137,926         119,301
       Prepaid expenses and other current assets                          3,911           4,260
       Deferred income taxes                                             10,946          10,318
                                                                      ---------       ---------
                Total current assets                                    277,567         233,107

PROPERTY AND EQUIPMENT, net                                              29,556          30,605

GOODWILL                                                                202,544         202,227

OTHER INTANGIBLE ASSETS, net                                             86,500          90,632

OTHER ASSETS                                                              9,280           8,711
                                                                      ---------       ---------
TOTAL ASSETS                                                          $ 605,447       $ 565,282
                                                                      =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
       Revolver                                                       $   7,000       $      --
       Current portion of long-term debt                                  7,000           7,000
       Accounts payable                                                  54,958          43,180
       Accrued expenses and other current liabilities                    19,982          19,623
       Current portion of interest rate swaps                             2,409              --
       Accrued interest payable                                          11,057           5,803
       Accrued merger expenses                                            4,323           4,739
       Income taxes payable                                               6,064              --
                                                                      ---------       ---------
                Total current liabilities                               112,793          80,345

LONG-TERM LIABILITIES:
       Deferred Income Taxes                                             26,924          22,543
       Interest Rate Swaps                                                4,185          12,793
       Long-Term Debt, Net of Current Portion                           329,275         334,525
                                                                      ---------       ---------
TOTAL LIABILITIES                                                       473,177         450,206
                                                                      =========       =========
COMMITMENTS AND CONTINGENCIES
SENIOR PREFERRED STOCK, $0.01 par value, 27,000,000 shares
  authorized; 23,600,014 shares issued and outstanding;
  at liquidation value                                                  420,767         379,612
                                                                      ---------       ---------
STOCKHOLDERS' EQUITY (DEFICIENCY):
       Common stock, no par value, 7,500,000 shares
          authorized; 5,399,736 and 5,334,546 shares issued
          and outstanding                                                 1,994           1,994
       Accumulated deficit                                             (289,568)       (265,548)
       Stockholder loans                                                 (1,575)         (1,545)
       Accumulated other comprehensive income                               652             563
                                                                      ---------       ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                                (288,497)       (264,536)
                                                                      ---------       ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                              $ 605,447       $ 565,282
                                                                      =========       =========
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                        1
<PAGE>

               INTERLINE BRANDS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
  THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 24, 2004 AND SEPTEMBER 26, 2003
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED          NINE MONTHS ENDED
                                                         SEPTEMBER 24,  SEPTEMBER 26,  SEPTEMBER 24,  SEPTEMBER 26,
                                                                 2004           2003           2004           2003
                                                         -------------  -------------  -------------  -------------
<S>                                                         <C>            <C>            <C>            <C>
NET SALES                                                   $ 190,400      $ 166,676      $ 548,383      $ 481,235
COST OF SALES                                                 117,214        103,308        338,529        298,241
                                                         -------------  -------------  -------------  -------------
    Gross profit                                               73,186         63,368        209,854        182,994
                                                         -------------  -------------  -------------  -------------
OPERATING EXPENSES :
    Selling, general and administrative expenses               49,724         43,693        148,062        126,678
    Depreciation and amortization                               2,988          3,134          9,414          8,759
    Special costs and expenses                                     --            132             --            510
                                                         -------------  -------------  -------------  -------------
       Total operating expense                                 52,712         46,959        157,476        135,947
                                                         -------------  -------------  -------------  -------------
OPERATING INCOME                                               20,474         16,409         52,378         47,047
CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS                     1,503          2,201          6,201          3,284
LOSS ON EXTINGUISHMENT OF DEBT                                     --             --             --        (14,893)
INTEREST EXPENSE                                              (10,269)       (10,320)       (30,563)       (30,146)
INTEREST INCOME                                                    32             23             65            100
OTHER INCOME (EXPENSE)                                            119             54            300             46
                                                         -------------  -------------  -------------  -------------
    Income before income taxes                                 11,859          8,367         28,381          5,438
PROVISION FOR INCOME TAXES                                      4,932          3,563         11,246          2,565
                                                         -------------  -------------  -------------  -------------
NET INCOME                                                      6,927          4,804         17,135          2,873
PREFERRED STOCK DIVIDENDS                                     (14,170)       (12,381)       (41,155)       (35,905)
                                                         -------------  -------------  -------------  -------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS                   $ (7,243)      $ (7,577)     $ (24,020)     $ (33,032)
                                                         =============  =============  =============  =============
LOSS PER COMMON SHARE - BASIC                                $  (1.34)      $  (1.41)       $ (4.45)       $ (6.13)
                                                         =============  =============  =============  =============
LOSS PER COMMON SHARE - DILUTED                              $  (1.34)      $  (1.41)       $ (4.45)       $ (6.13)
                                                         =============  =============  =============  =============
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       2
<PAGE>

                     INTERLINE BRANDS, INC AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                  (UNAUDITED)
                      NINE MONTHS ENDED SEPTEMBER 24, 2004
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                       RETAINED    ACCUMULATED
                                                                       EARNINGS       OTHER            TOTAL
                                        COMMON STOCK     STOCKHOLDER  (ACCUMULATED COMPREHENSIVE    STOCKHOLDERS'
                                    SHARES      AMOUNT      LOANS      DEFICIT)      INCOME      (DEFICIENCY) EQUITY
                                 ---------   ---------   ------------ ------------ ------------- --------------------
<S>                              <C>         <C>         <C>          <C>          <C>            <C>
BALANCE, DECEMBER 26, 2003       5,334,546   $   1,994   $  (1,545)   $(265,548)   $     563      $         (264,536)

Preferred dividends                     --          --          --      (41,155)          --                 (41,155)
Interest on shareholder notes           --          --         (30)          --           --                     (30)
Issuance of restricted stock        65,190          --          --           --           --                      --
Comprehensive income:
  Net income                            --          --          --       17,135           --                      --
  Foreign currency translation          --          --          --           --           89                      --
Total comprehensive income              --          --          --           --           --                  17,224

                                 ---------   ---------   ---------    ---------    ---------      ------------------
BALANCE, SEPTEMBER 24, 2004      5,399,736   $   1,994   $  (1,575)   $(289,568)   $     652      $         (288,497)
                                 =========   =========   =========    =========    =========      ==================
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>

                     INTERLINE BRANDS, INC AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
           NINE MONTHS ENDED SEPTEMBER 24, 2004 AND SEPTEMBER 26, 2003
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                       NINE MONTHS ENDED
                                                                            SEPTEMBER 24, 2004   SEPTEMBER 26, 2003
                                                                            ------------------   ------------------
<S>                                                                         <C>                  <C>
OPERATING ACTIVITIES :
 Net income                                                                 $           17,135   $           2,873
 Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                                                       9,414               8,759
     Amortization and write-off of debt issuance costs                                   1,428               7,855
     Accretion and write-off of discount on 16% senior subordinated notes                   --               4,410
     Redemption premium on 16% senior subordinated notes                                    --               3,879
     Change in fair value of interest rate swaps                                        (6,201)             (3,284)
     Loss on disposal of property and equipment                                             --                   3
     Interest income on stockholder notes                                                  (30)                (78)
     Deferred income taxes                                                               3,754                 423
     16% senior subordinated notes issued for interest due                                  --               1,674
 Changes in assets and liabilities, net of effects of acquisition:
     Cash - restricted                                                                      (1)                329
     Accounts receivable - trade                                                       (24,108)            (10,375)
     Accounts receivable - other                                                         1,435               2,590
     Inventory                                                                         (18,625)             12,576
     Prepaid expenses and other current assets                                             350                (450)
     Other assets                                                                         (210)                (73)
     Accrued interest payable                                                            5,254               6,792
     Accounts payable                                                                   11,778              (3,187)
     Accrued expenses and other current liabilities                                        477              (1,778)
     Accrued merger expenses                                                              (416)             (1,210)
     Income taxes payable                                                                6,064                  --
                                                                            ------------------   -----------------
        Net cash provided by operating activities                                        7,498              31,728
                                                                            ------------------   -----------------
INVESTING ACTIVITIES :
 Purchase of property and equipment                                                     (5,359)             (3,495)
 Purchase of businesses, net of cash acquired                                             (509)             (3,747)
                                                                            ------------------   -----------------
        Net cash used in investing activities                                           (5,868)             (7,242)
                                                                            ------------------   -----------------
FINANCING ACTIVITIES :
 Increase (decrease) in revolver and swingline, net                                      7,000             (18,500)
 Repayment of debt                                                                      (5,250)           (317,487)
 Proceeds from refinancing transactions                                                     --             340,000
 Payment of debt issuance and offering costs                                              (587)            (12,020)
                                                                            ------------------   -----------------
        Net cash provided by (used in) financing activities                              1,163              (8,007)
                                                                            ------------------   -----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                                89                 666
                                                                            ------------------   -----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                2,882              17,145
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           1,612               5,557
                                                                            ------------------   -----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $            4,494   $          22,702
                                                                            ==================   =================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
 Cash paid during the period for :
     Interest                                                               $           23,853   $          18,082
                                                                            ==================   =================
     Income taxes (net of refunds)                                          $              457   $           1,404
                                                                            ==================   =================
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
     Dividends on preferred stock                                           $           41,155   $          35,905
                                                                            ==================   =================
     Note issued for purchase of investment                                 $               --   $           3,275
                                                                            ==================   =================
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
--------------------------------------------------------------------------------

1.   BASIS OF PRESENTATION

     The accompanying unaudited interim financial statements of Interline
     Brands, Inc. and its susidiaries ("Interline" or the "Company") have been
     prepared in accordance with accounting principles generally accepted in the
     United States of America and the rules and regulations of the Securities
     and Exchange Commission, which apply to interim financial statements. These
     unaudited consolidated financial statements do not include all disclosures
     provided in the annual financial statements and notes thereto contained in
     the Annual Report on Form 10-K for Interline Brands, Inc. for the year
     ended December 26, 2003 as filed with the Securities and Exchange
     Commission on March 25, 2004. All adjustments which are, in the opinion of
     management, necessary for a fair statement of the results for the interim
     periods presented have been recorded. The results of operations for the
     interim periods presented are not necessarily indicative of the results to
     be expected for the full year.

     The Company is in one industry, the distribution of maintenance, repair and
     operations, or MRO, products. In accordance with Statement of Financial
     Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of an
     Enterprise and Related Information", the Company has one operating segment.
     Our net sales for the nine month periods ended September 24, 2004 and
     September 26, 2003 by product category were approximately (in millions):

                                               NINE MONTHS      NINE MONTHS
                                                  ENDED            ENDED
                                              SEPTEMBER 24,    SEPTEMBER 26,
     PRODUCT CATEGORY                              2004             2003
     ----------------                         -------------    -------------
     Plumbing................................    $241.3           $226.2
     Electrical..............................      82.3             52.9
     Security Hardware.......................      38.4             38.5
     Hardware................................      38.4             33.7
     HVAC....................................      38.3             28.9
     Appliances and Parts ...................      32.9             33.7
     Other...................................      76.8             67.3
                                                 ------           ------
     Total...................................    $548.4           $481.2
                                                 ======           ======


2.   EARNINGS PER SHARE

     Net income per share for all periods has been computed in accordance with
     SFAS No. 128, "Earnings per Share". Basic net income(loss) per share is
     computed by dividing net income(loss) applicable to common stockholders by
     the weighted-average number of shares outstanding during the year. Diluted
     net income per share is computed by dividing net income attributable to
     common stockholders by the weighted-average number of shares outstanding
     during the year, assuming dilution.



                                       5
<PAGE>

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
--------------------------------------------------------------------------------

     The amounts used in calculating net income (loss) per share data are as
     follows:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED             NINE MONTHS ENDED
                                                    SEPTEMBER 24,   SEPTEMBER 26,   SEPTEMBER 24,   SEPTEMBER 26,
                                                        2004           2003             2004            2003
                                                    ------------    ------------    -------------   -------------
     <S>                                              <C>            <C>             <C>              <C>
     Net income                                       $  6,927       $  4,804        $  17,135        $   2,873
     Preferred stock dividends                         (14,170)       (12,381)         (41,155)         (35,905)
                                                      --------       --------        ---------        ---------
     Net loss applicable to common stockholders       $ (7,243)      $ (7,577)       $ (24,020)       $ (33,032)
                                                      ========       ========        =========        =========

     Weighted average shares outstanding - basic         5,400          5,385            5,400            5,385
     Effect of dilutive stock options                       --             --               --               --
                                                      --------       --------        ---------        ---------
     Weighted average shares outstanding - diluted       5,400          5,385            5,400            5,385
                                                      ========       ========        =========        =========
</TABLE>

     Options to purchase 191,052 and 177,532 shares of common stock which were
     outstanding at September 24, 2004 and September 26, 2003, respectively,
     were not included in the computation of weighted average shares
     outstanding-diluted because the exercise prices of the options are greater
     than the average fair market value of common stock and the effect would be
     antidilutive.

3.   DEBT

     Long-term debt at September 24, 2004 and December 26, 2003 consists of the
     following:

                                           SEPTEMBER 24,        DECEMBER 26,
                                               2004                 2003
                                           -------------        ------------
     Term Loan                               $ 133,000           $ 138,2500
     Note payable                                3,275                3,275
     11.5% Senior Subordinated Notes           200,000              200,000
                                           -------------        ------------
                                               336,275              341,525
     Less current portion                       (7,000)              (7,000)
                                           -------------        ------------
                                             $ 329,275            $ 334,525
                                           =============        ============



                                       6
<PAGE>

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
--------------------------------------------------------------------------------

     In May 2003, the Company completed an offering of $200.0 million principal
     amount of 11.5% senior subordinated notes due 2011 and entered into a new
     $205.0 million senior secured credit facility which consists of a $140.0
     million term loan facility and a $65.0 million revolving loan facility, a
     portion of which is available in the form of letters of credit. The net
     proceeds from the offering of senior subordinated notes and the refinancing
     of the former credit facility with the new credit facility were used to:
     (1) repay all outstanding indebtedness under our former credit facility,
     (2) redeem all of the 16% senior subordinated notes, (3) pay accrued
     interest and related redemption premiums on our former debt and (4) pay
     transaction fees and expenses related to the offering and new credit
     facility. These transactions are referred to collectively as the
     "Refinancing Transactions".

     The $200.0 million principal amount 11.5% senior subordinated notes due
     2011, pay interest each May 15 and November 15. Prior to May 15, 2006, the
     Company may redeem up to 35% of the senior subordinated notes using
     proceeds of certain equity offerings. The Company may redeem all or a
     portion of the notes after May 15, 2007, subject to redemption premiums
     unless redeemed after May 15, 2009.

     Borrowings under the term loan facility and revolving loan facility bear
     interest, at the Company's option, at either LIBOR plus a spread, currently
     3.5%, or at an alternate base rate plus a spread, currently 2.75%. Interest
     rates in effect on borrowings under the term loan facility at September 24,
     2004 ranged from 5.46% for LIBOR based borrowings to 7.25% for prime based
     borrowings. Outstanding letters of credit under the revolving loan facility
     are subject to a per annum fee equal to the applicable spread over the
     adjusted LIBOR for revolving loans. The term loan facility matures on
     November 30, 2009 and the revolving loan facility matures on May 31, 2008.

     As of September 24, 2004, the Company had $9.0 million of letters of credit
     issued and $49.0 million available under the revolving loan facility. There
     was $7.0 million in borrowings outstanding under the revolving loan
     facility at September 24, 2004. The credit facility is secured by
     substantially all of the assets of the Company.

     Periodically, the Company enters into derivative financial instruments,
     including interest rate exchange agreements, to manage its exposure to
     fluctuations in interest rates on its debt. At September 24, 2004, the
     Company had interest rate exchange agreements, or swaps, outstanding with a
     total notional amount of $151.0 million. These agreements, which mature
     between April and October of 2005, effectively fix the interest rate on the
     Company's variable rate borrowings under the term loan facility at a
     weighted average rate of 6.56%. The market value of the outstanding
     interest rate exchange agreements of $6.6 million has been recorded as
     current portion of interest rate swaps of $2.4 million and long-term
     liability of $4.2 million at September 24, 2004. The Company's derivative
     activities are for purposes other than trading.

     The credit facility contains customary affirmative and negative covenants
     that limit the Company's ability to incur additional indebtedness, pay
     dividends on its common stock or redeem, repurchase or retire its common
     stock or subordinated indebtedness, make certain investments, sell assets,
     and consolidate, merge or transfer assets, and that require the Company to
     maintain certain debt to cash flow and interest expense coverage ratios.
     The Company was in compliance with all covenants at September 24, 2004.

     In April 2003, the Company issued a non-recourse note payable in the
     principal amount of $3.3 million for the purchase of an investment. This
     note, which is secured only by the investment, bears interest at a rate of
     4% per annum, with principal due in full in April 2010.


                                       7
<PAGE>

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
--------------------------------------------------------------------------------

     The maturities of long-term debt subsequent to September 24, 2004 are as
     follows:

                  2004                           $     3,500
                  2005                                 6,125
                  2006                                11,375
                  2007                                14,000
                  2008                                15,750
                  Thereafter                         285,525
                                                 -----------
                                                 $   336,275
                                                 ===========


4.   STOCK OPTION PLANS

     During 2000, the Company established a Stock Award Plan, (the "2000 Plan"),
     under which the Company may award a total of 525,000 shares of common stock
     in the form of incentive stock options, nonqualified stock options, stock
     appreciation rights, or SARs, and restricted stock awards, all of which may
     be awarded to directors, officers, key employees and consultants. The
     exercise price per share for an incentive stock option may not be less than
     100% of the estimated fair market value of a share of common stock on the
     grant date. The exercise price per share for an incentive stock option
     granted to a person owning stock possessing more than 10% of the total
     combined voting power of all classes of stock may not be less than 110% of
     the estimated fair market value of a share of common stock on the grant
     date, and may not be exercisable after the expiration of five years from
     the date of grant. The options generally vest ratably over a five-year
     period and may not be exercisable after the expiration of 10 years from the
     date of grant. The Company's compensation committee will determine in its
     sole discretion whether a SAR is settled in cash, shares or a combination
     of cash and shares.

     A summary of the status of the Company's stock option plans is as follows:

<TABLE>
<CAPTION>
                                                                                        WEIGHTED
                                                 NUMBER         EXERCISE PRICE     AVERAGE EXERCISE
                                                OF SHARES          PER SHARE        PRICE PER SHARE
                                                ---------       --------------     ----------------
<S>                                             <C>            <C>                 <C>
     Outstanding at December 26, 2003            187,532       $ 0.50 - $ 20.33          $ 6.17

     2004:
       Granted                                     4,694                   0.50            0.50
       Cancelled                                  (1,174)                  0.50            0.50
                                                 -------
     Outstanding at September 24, 2004           191,052       $ 0.50 - $ 20.33         $ 6.10
                                                 =======
</TABLE>

      The Company accounts for stock-based compensation using the intrinsic
     value based method under Accounting Principles Board Opinion No. 25 (APB
     No. 25), "Accounting for Stock Issued to Employees," and related
     Interpretations. No stock-based employee compensation cost is reflected in
     net income, as all options granted under the 2000 Plan had an exercise
     price no less than the estimated market value of the underlying common
     stock on the date of grant. The effect on net income and earnings per share
     if the Company had applied the fair value recognition provisions of
     Statement of Financial Accounting Standards ("SFAS") Statement No. 123,
     "Accounting for Stock-Based Compensation," to stock-based employee
     compensation was immaterial. The fair value of each option was estimated on
     the date of grant using the Black-Scholes option pricing model, with the
     following assumptions used for options granted in 2003 and 2004: dividend
     yield of 0%, expected volatility of 0%, risk-free rate of 3.48% and 4.05%,
     respectively, and expected life of 5 years.


                                       8
<PAGE>

                     INTERLINE BRANDS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)
                   (IN THOUSANDS, EXCEPT SHARE PER SHARE DATA)
--------------------------------------------------------------------------------

5.   SUBSIDIARY GUARANTORS

     The Company completed an offering of $200 million principal amount of
     senior subordinated notes in connection with its Refinancing Transactions.
     The Company filed a registration statement with the Securities and Exchange
     Commission with respect to an exchange offer for the senior subordinated
     notes and with respect to resales of the senior subordinated notes by an
     affiliate of the Company for market-making purposes. The registration
     statement has been declared effective by the SEC. The Company's new senior
     subordinated notes are fully and unconditionally guaranteed, jointly and
     severally, on a subordinated basis by Wilmar Holdings, Inc., Wilmar
     Financial, Inc., and Glenwood Acquisition LLC (wholly-owned subsidiaries of
     Interline). The guarantees by these subsidiary guarantors (the "Subsidiary
     Guarantors") will be senior to any of their existing and future
     subordinated obligations, equal in right of payment with any of their
     existing and future senior subordinated indebtedness and subordinated to
     any of their existing and future senior indebtedness. These guarantor
     subsidiaries constitute all of the Company's direct and indirect
     subsidiaries and the separate financial statements of the guarantor
     subsidiaries are not presented because management determined they would be
     immaterial to investors. Accordingly, condensed consolidating financial
     statements for Interline Brands, Inc. and the Subsidiary Guarantors are
     presented below.




                                       9
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                                       CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
                                                As of September 24, 2004
--------------------------------------------------------------------------------------------------------------------

                                                                     PARENT   SUBSIDIARY
                                                                    COMPANY   GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                                  ---------    ---------  ------------  ------------
                                                                    (In thousands, except share and per share data)
<S>                                                               <C>          <C>        <C>           <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                       $   4,426    $      68  $        --   $     4,494
  Cash-restricted                                                     1,001           --           --         1,001
  Accounts receivable - trade, net                                  107,792           --           --       107,792
  Accounts receivable - other                                        11,497           --           --        11,497
  Inventory                                                         137,926           --           --       137,926
  Prepaid expenses and other current assets                           3,908            3           --         3,911
  Deferred income taxes                                              10,946           --           --        10,946
  Due from Parent                                                        --       75,740      (75,740)           --
  Investment in subsidiaries                                         37,777           --      (37,777)           --
                                                                  ---------    ---------  -----------   -----------
           Total current assets                                     315,273       75,811     (113,517)      277,567

PROPERTY AND EQUIPMENT, net                                          29,556           --           --        29,556

GOODWILL                                                            202,544           --           --       202,544

OTHER INTANGIBLE ASSETS, net                                         86,500           --           --        86,500

OTHER ASSETS                                                          5,981        6,914       (3,615)        9,280
                                                                  ---------    ---------  -----------   -----------
TOTAL ASSETS                                                      $ 639,854    $  82,725  $  (117,132)  $   605,447
                                                                  =========    =========  ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
   (DEFICIENCY)

                              CURRENT LIABILITIES:
  Revolver                                                        $   7,000    $      --  $        --   $     7,000
  Current portion of long-term debt                                   7,000           --           --         7,000
  Accounts payable                                                   54,957            1           --        54,958
  Accrued expenses and other current liabilities                     19,982           --           --        19,982
  Current portion of interest rate swaps                              2,409           --           --         2,409
  Accrued interest payable                                           11,057           --           --        11,057
  Accrued merger expenses                                             4,323           --           --         4,323
  Income taxes payable                                                  564        5,500           --         6,064
  Due to subsidiaries                                                43,183           --      (43,183)           --
                                                                  ---------    ---------  -----------   -----------
           Total current liabilities                                150,475        5,501      (43,183)      112,793

LONG-TERM LIABILITIES:
  Deferred income taxes                                              26,924           --           --        26,924
  Interest rate swaps                                                 4,185           --           --         4,185
  Long-term debt, net of current portion                            326,000        3,275           --       329,275
                                                                  ---------    ---------  -----------   -----------
TOTAL LIABILITIES                                                   507,584        8,776      (43,183)      473,177
                                                                  ---------    ---------  -----------   -----------
SENIOR PREFERRED STOCK, $0.01 par value, 27,000,000
    shares authorized; 23,600,014 shares issued and outstanding     420,767           --           --       420,767

STOCKHOLDERS' EQUITY (DEFICIENCY):
  Common stock, no par value,  7,500,000 shares authorized,
   5,399,736 shares issued and outstanding                            1,994           --           --         1,994
  Additional paid-in-capital                                             --       43,285      (43,285)           --
  Accumulated deficit                                              (289,568)      30,664      (30,664)     (289,568)
  Stockholder loans                                                  (1,575)          --           --        (1,575)
  Dividends                                                              --           --           --            --
  Accumulated other comprehensive loss                                  652           --           --           652
                                                                  ---------    ---------  -----------   -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                            (288,497)      73,949      (73,949)     (288,497)
                                                                  ---------    ---------  -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY (DEFICIENCY)                                            $ 639,854    $  82,725  $  (117,132)  $   605,447
                                                                  =========    =========  ===========   ===========
</TABLE>

                                       10
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                                       CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
                                                As of December 26, 2003
--------------------------------------------------------------------------------------------------------------------

                                                                     PARENT   SUBSIDIARY
                                                                    COMPANY   GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                                  ---------    ---------  ------------  ------------
                                                                    (In thousands, except share and per share data)
<S>                                                               <C>          <C>        <C>           <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                       $   1,527    $      85   $        --  $      1,612
  Cash-restricted                                                     1,000           --            --         1,000
  Accounts receivable - trade, net                                   83,684           --            --        83,684
  Accounts receivable - other                                        12,932           --            --        12,932
  Inventory                                                         119,301           --            --       119,301
  Prepaid expenses and other current assets                           4,255            5            --         4,260
  Deferred income taxes                                              10,318           --            --        10,318
  Due from Parent                                                        --       66,586       (66,586)           --
  Investment in subsidiaries                                         41,003           --       (41,003)           --
                                                                  ---------    ---------  ------------  ------------
           Total current assets                                     274,020       66,676      (107,589)      233,107

PROPERTY AND EQUIPMENT, net                                          30,605           --            --        30,605

GOODWILL                                                            202,227           --            --       202,227

OTHER INTANGIBLE ASSETS, net                                         90,632           --            --        90,632

OTHER ASSETS                                                          5,412        6,614        (3,315)        8,711
                                                                  ---------    ---------  ------------  ------------
TOTAL ASSETS                                                      $ 602,896    $  73,290  $   (110,904) $    565,282
                                                                  =========    =========  ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
   (DEFICIENCY)

                              CURRENT LIABILITIES:
  Current portion of long-term debt                               $   7,000    $      --     $      --  $      7,000
  Accounts payable                                                   43,170           10            --        43,180
  Accrued expenses and other current liabilities                     19,623           --            --        19,623
  Accrued interest payable                                            5,803           --            --         5,803
  Accrued merger expenses                                             4,739           --            --         4,739
  Income taxes payable                                               (2,400)       2,400            --            --
  Due to subsidiaries                                                43,299           --       (43,299)           --
                                                                  ---------    ---------  ------------  ------------
           Total current liabilities                                121,234        2,410       (43,299)       80,345

LONG-TERM LIABILITIES:
  Deferred income taxes                                              22,543           --            --        22,543
  Interest rate swaps                                                12,793           --            --        12,793
  Long-term debt, net of current portion                            331,250        3,275            --       334,525
                                                                  ---------    ---------  ------------  ------------
TOTAL LIABILITIES                                                   487,820        5,685       (43,299)      450,206
                                                                  ---------    ---------  ------------  ------------
SENIOR PREFERRED STOCK, $0.01 par value, 27,000,000
    shares authorized; 23,600,014 shares issued and outstanding     379,612           --            --       379,612

STOCKHOLDERS' EQUITY (DEFICIENCY):
  Common stock, no par value,  7,500,000 shares authorized,
   5,334,546 shares issued and outstanding                            1,994           --            --         1,994
  Additional paid-in-capital                                             --       43,285       (43,285)           --
  Accumulated deficit                                              (265,548)      24,320       (24,320)     (265,548)
  Stockholder loans                                                  (1,545)          --            --        (1,545)
  Dividends                                                              --           --            --            --
  Accumulated other comprehensive loss                                  563           --            --           563
                                                                  ---------    ---------  ------------  ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                            (264,536)      67,605       (67,605)     (264,536)
                                                                  ---------    ---------  ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY (DEFICIENCY)                                            $ 602,896    $  73,290  $   (110,904) $    565,282
                                                                  =========    =========  ============  ============

</TABLE>

                                       11
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                           CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                                     Three Months Ended September 24, 2004
----------------------------------------------------------------------------------------------------

                                                  PARENT      SUBSIDIARY
                                                  COMPANY     GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                 ---------    ----------  ------------  ------------
                                                    (In thousands, except share and per share data)
<S>                                              <C>          <C>         <C>           <C>
NET SALES                                        $ 190,400    $       --  $        --   $    190,400
COST OF SALES                                      117,214            --           --        117,214
                                                 ---------    ----------  ------------  ------------
          Gross profit                              73,186            --           --         73,186

OPERATING EXPENSES:
  Selling, general and administrative expenses      49,720             4           --         49,724
  Depreciation and amortization                      2,988            --           --          2,988
                                                 ---------    ----------  ------------  ------------
          Total operating expenses                  52,708             4           --         52,712
                                                 ---------    ----------  ------------  ------------
OPERATING INCOME (LOSS)                             20,478            (4)          --         20,474

CHANGE IN FAIR VALUE OF INTEREST
  RATE SWAPS                                         1,503            --           --          1,503
INTEREST EXPENSE                                   (13,449)           --        3,180        (10,269)
INTEREST INCOME                                         32         3,180       (3,180)            32
OTHER INCOME                                           119           119         (119)           119
EQUITY IN EARNINGS OF SUSIDIARIES                    2,076            --       (2,076)            --
                                                 ---------    ----------  ------------  ------------
          Income before income taxes                10,759         3,295       (2,195)        11,859

PROVISION FOR INCOME TAXES                           3,832         1,100           --          4,932
                                                 ---------    ----------  ------------  ------------
NET INCOME                                           6,927         2,195       (2,195)         6,927

PREFERRED STOCK DIVIDENDS                          (14,170)           --           --        (14,170)
                                                 ---------    ----------  ------------  ------------
NET (LOSS) INCOME APPLICABLE TO
   COMMON STOCKHOLDERS                           $  (7,243)   $    2,195  $    (2,195)  $     (7,243)
                                                 =========    ==========  ===========   ============
</TABLE>

                                       12
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                           Three Months Ended September 26, 2003
----------------------------------------------------------------------------------------------------

                                                  PARENT      SUBSIDIARY
                                                  COMPANY     GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                 ---------    ----------  ------------  ------------
                                                    (In thousands, except share and per share data)
<S>                                              <C>          <C>         <C>           <C>
NET SALES                                        $ 166,676    $       --  $         --  $    166,676
COST OF SALES                                      103,308            --            --       103,308
                                                 ---------    ----------  ------------  ------------
          Gross profit                              63,368            --            --        63,368

OPERATING EXPENSES:
  Selling, general and administrative expenses      43,689             4            --        43,693
  Depreciation and amortization                      3,134            --            --         3,134
  Special costs and expenses                           132            --            --           132
                                                 ---------    ----------  ------------  ------------
          Total operating expenses                  46,955             4            --        46,959
                                                 ---------    ----------  ------------  ------------
OPERATING INCOME (LOSS)                             16,413            (4)           --        16,409

CHANGE IN FAIR VALUE OF INTEREST
  RATE SWAPS                                         2,201            --            --         2,201
EARLY EXTINGUISHMENT OF DEBT                            --            --            --
INTEREST EXPENSE                                   (14,006)           --         3,686       (10,320)
INTEREST INCOME                                         23         3,686        (3,686)           23
OTHER INCOME                                            54            --            --            54
EQUITY IN EARNINGS OF SUSIDIARIES                    2,482            --        (2,482)           --
                                                 ---------    ----------  ------------  ------------
          Income before income taxes                 7,167         3,682        (2,482)        8,367

PROVISION FOR INCOME TAXES                           2,363         1,200            --         3,563
                                                 ---------    ----------  ------------  ------------
NET INCOME                                           4,804         2,482        (2,482)        4,804

PREFERRED STOCK DIVIDENDS                          (12,381)           --            --       (12,381)
                                                 ---------    ----------  ------------  ------------
NET (LOSS) INCOME APPLICABLE TO
   COMMON STOCKHOLDERS                           $  (7,577)   $    2,482  $     (2,482) $     (7,577)
                                                 =========    ==========  ============  ============
</TABLE>

                                       13
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                     CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                                Nine Months Ended September 24, 2004
----------------------------------------------------------------------------------------------------

                                                  PARENT      SUBSIDIARY
                                                  COMPANY     GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                 ---------    ----------  ------------  ------------
                                                    (In thousands, except share and per share data)
<S>                                              <C>          <C>         <C>           <C>
NET SALES                                        $ 548,383    $      --   $         --  $    548,383
COST OF SALES                                      338,529           --             --       338,529
                                                 ---------    ----------  ------------  ------------
          Gross profit                             209,854           --             --       209,854

OPERATING EXPENSES:
  Selling, general and administrative expenses     148,050           12             --       148,062
  Depreciation and amortization                      9,414           --             --         9,414
                                                 ---------    ----------  ------------  ------------
          Total operating expenses                 157,464           12             --       157,476
                                                 ---------    ----------  ------------  ------------
OPERATING INCOME (LOSS)                             52,390          (12)            --        52,378

CHANGE IN FAIR VALUE OF INTEREST
  RATE SWAPS                                         6,201           --             --         6,201
INTEREST EXPENSE                                   (39,719)          --          9,156       (30,563)
INTEREST INCOME                                         65        9,156         (9,156)           65
OTHER INCOME                                           300          300           (300)          300
EQUITY IN EARNINGS OF SUSIDIARIES                    6,044           --         (6,044)           --
                                                 ---------    ----------  ------------  ------------
          Income before income taxes                25,281        9,444         (6,344)       28,381

PROVISION FOR INCOME TAXES                           8,146        3,100             --        11,246
                                                 ---------    ----------  ------------  ------------
NET INCOME                                          17,135        6,344         (6,344)       17,135

PREFERRED STOCK DIVIDENDS                          (41,155)          --             --       (41,155)
                                                 ---------    ----------  ------------  ------------
NET (LOSS) INCOME APPLICABLE TO
   COMMON STOCKHOLDERS                           $ (24,020)   $   6,344   $     (6,344) $    (24,020)
                                                 =========    ==========  ============  ============
</TABLE>

                                       14
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                        CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                                   Nine Months Ended September 26, 2003
----------------------------------------------------------------------------------------------------

                                                  PARENT      SUBSIDIARY
                                                  COMPANY     GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                 ---------    ----------  ------------  ------------
                                                    (In thousands, except share and per share data)
<S>                                              <C>          <C>         <C>           <C>
NET SALES                                        $ 481,235    $       --  $         --  $    481,235
COST OF SALES                                      298,241            --            --       298,241
                                                 ---------    ----------  ------------  ------------
          Gross profit                             182,994            --            --       182,994

OPERATING EXPENSES:
  Selling, general and administrative expenses     126,651            27            --       126,678
  Depreciation and amortization                      8,759            --            --         8,759
  Special costs and expenses                           510            --            --           510
                                                 ---------    ----------  ------------  ------------
          Total operating expenses                 135,920            27            --       135,947
                                                 ---------    ----------  ------------  ------------
OPERATING INCOME (LOSS)                             47,074           (27)           --        47,047

CHANGE IN FAIR VALUE OF INTEREST
  RATE SWAPS                                         3,284            --            --         3,284
EARLY EXTINGUISHMENT OF DEBT                       (14,893)           --            --       (14,893)
INTEREST EXPENSE                                   (41,055)           --        10,909       (30,146)
INTEREST INCOME                                        100        10,909       (10,909)          100
OTHER INCOME                                            46            46           (46)           46
EQUITY IN EARNINGS OF SUSIDIARIES                    7,182            --        (7,182)           --
                                                 ---------    ----------  ------------  ------------
          Income before income taxes                 1,738        10,928        (7,228)        5,438

(BENEFIT) PROVISION FOR INCOME TAXES                (1,135)        3,700            --         2,565
                                                 ---------    ----------  ------------  ------------
NET INCOME                                           2,873         7,228        (7,228)        2,873

PREFERRED STOCK DIVIDENDS                          (35,905)           --            --       (35,905)
                                                 ---------    ----------  ------------  ------------
NET (LOSS) INCOME APPLICABLE TO
   COMMON STOCKHOLDERS                           $ (33,032)   $    7,228  $     (7,228) $    (33,032)
                                                 =========    ==========  ============  ============
</TABLE>

                                       15
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                                CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
                                            Nine Months Ended September 24, 2004
-------------------------------------------------------------------------------------------------------------------

                                                                   PARENT    SUBSIDIARY
                                                                  COMPANY    GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                                 ---------   ----------  ------------  ------------
                                                                   (In thousands)
<S>                                                              <C>         <C>         <C>           <C>
OPERATING ACTIVITIES:
  Net income                                                     $ 17,135    $    6,344  $     (6,344) $     17,135
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                   9,414            --            --         9,414
    Amortization of debt issuance costs                             1,428            --            --         1,428
    Change in fair value of interest rate swaps                    (6,201)           --            --        (6,201)
    Interest on shareholder loans                                     (30)           --            --           (30)
    Deferred income taxes                                           3,754            --            --         3,754
    Equity in earnings of subsidiaries                             (6,344)           --         6,344            --
    Changes in assets and liabilities, net of effects
        of acquisition:
      Cash - restricted                                                (1)           --            --            (1)
      Accounts receivable - trade                                 (24,108)           --            --       (24,108)
      Accounts receivable - other                                   1,435            --            --         1,435
      Inventory                                                   (18,625)           --            --       (18,625)
      Prepaid expenses and other current assets                       347             3            --           350
      Due from parent                                                  --        (9,156)        9,156            --
      Other assets                                                     90          (300)           --          (210)
      Accrued interest payable                                      5,254            --            --         5,254
      Accounts payable                                             11,786            (8)           --        11,778
      Accrued expenses and other current liabilities                  477            --            --           477
      Accrued merger expenses                                        (416)           --            --          (416)
      Income taxes payable                                          2,964         3,100            --         6,064
      Due to subsidiaries                                           9,156            --        (9,156)           --
                                                                 ---------   ----------  ------------  ------------
           Net cash provided by (used in) operating activities      7,515           (17)           --         7,498
                                                                 ---------   ----------  ------------  ------------
INVESTING ACTIVITIES:
  Purchase of property and equipment                               (5,359)           --            --        (5,359)
  Purchase of business, net of assets acquired                       (509)           --            --          (509)
                                                                 ---------   ----------  ------------  ------------
           Net cash used in investing activities                   (5,868)           --            --        (5,868)
                                                                 ---------   ----------  ------------  ------------
FINANCING ACTIVITIES:
    Increase in revolver and swingline, net                         7,000            --            --         7,000
    Repayment of debt                                              (5,250)           --            --        (5,250)
    Payment of debt issuance and offering costs                      (587)           --            --          (587)
                                                                 ---------   ----------  ------------  ------------
           Net cash provided by financing activities                1,163            --            --         1,163
                                                                 ---------   ----------  ------------  ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                                                     89            --            --            89
                                                                 ---------   ----------  ------------  ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                2,899           (17)           --         2,882

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      1,527            85            --         1,612
                                                                 ---------   ----------  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                         $  4,426    $       68  $         --  $      4,494
                                                                 ========    ==========  ============  ============
</TABLE>

                                       16
<PAGE>

5.   SUBSIDIARY GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
                           CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
                                       Nine Months Ended September 26, 2003
-------------------------------------------------------------------------------------------------------------------

                                                                   PARENT    SUBSIDIARY
                                                                  COMPANY    GUARANTORS  ELIMINATIONS  CONSOLIDATED
                                                                 ---------   ----------  ------------  ------------
                                                                   (In thousands)
<S>                                                              <C>         <C>         <C>           <C>
OPERATING ACTIVITIES:
  Net income                                                     $   2,873   $    7,228  $     (7,228) $      2,873
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                    8,759           --            --         8,759
    Amortization and write-off of debt issuance costs                7,855           --            --         7,855
    Accretion and write off of discount on 16% senior
       subordinated notes                                            4,410           --            --         4,410
    Redemption premium on 16% senior subordinated notes              3,879           --            --         3,879
    Change in fair value of interest rate swaps                     (3,284)          --            --        (3,284)
    Loss on disposal of property and equipment                           3           --            --             3
    Interest on shareholder loans                                      (78)          --            --           (78)
    Deferred income taxes                                              423           --            --           423
    16% senior subordinated notes issued for interest dues           1,674           --            --         1,674
    Equity in earnings of subsidiaries                              (7,228)          --         7,228            --
    Changes in assets and liabilities, net of effects of
        acquisition:
      Cash - restricted                                                329           --            --           329
      Accounts receivable - trade                                  (10,375)          --            --       (10,375)
      Accounts receivable - other                                    2,590           --            --         2,590
      Inventory                                                     12,576           --            --        12,576
      Prepaid expenses and other current assets                       (455)           5            --          (450)
      Other assets                                                      (3)         (70)           --           (73)
      Accrued interest payable                                       6,792           --            --         6,792
      Accounts payable                                              (3,187)          --            --        (3,187)
      Accrued expenses and other current liabilities                (1,778)          --            --        (1,778)
      Accrued merger expenses                                       (1,210)          --            --        (1,210)
      Income taxes payable                                          (1,200)       1,200            --            --
      Due to subsidiaries                                          (11,280)          --        11,280            --
      Due from parent                                                   --       11,280       (11,280)           --
                                                                 ---------   ----------  ------------  ------------
           Net cash provided by operating activities                12,085       19,643            --        31,728
                                                                 ---------   ----------  ------------  ------------
INVESTING ACTIVITIES:
  Purchase of property and equipment                                (3,495)          --            --        (3,495)
  Purchase of businesses, net of cash acquired                        (472)      (3,275)           --        (3,747)
                                                                 ---------   ----------  ------------  ------------
           Net cash used in investing activities                    (3,967)      (3,275)           --        (7,242)
                                                                 ---------   ----------  ------------  ------------
FINANCING ACTIVITIES:
    Decrease in revolver and swingline, net                        (18,500)          --            --       (18,500)
    Repayment of long-term borrowing                              (317,487)          --            --      (317,487)
    Proceeds from refinancing transactions                         340,000           --            --       340,000
    Payment of debt issuance costs                                 (12,020)          --            --       (12,020)
    Dividends Paid                                                  19,647      (19,647)           --            --
    Contribution from Parent                                        (3,275)       3,275            --            --
                                                                 ---------   ----------  ------------  ------------
           Net cash provided by (used in) financing activities       8,365      (16,372)           --        (8,007)
                                                                 ---------   ----------  ------------  ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS                                                       666           --            --           666
                                                                 ---------   ----------  ------------  ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                17,149           (4)           --        17,145

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       5,459           98            --         5,557
                                                                 ---------   ----------  ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                         $  22,608   $       94  $         --  $     22,702
                                                                 =========   ==========  ============    ============
</TABLE>

                                       17
<PAGE>

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


YOU SHOULD READ THE FOLLOWING DISCUSSION IN CONJUNCTION WITH OUR UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED IN THIS QUARTERLY
REPORT, AND OUR AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES
INCLUDED IN OUR ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

         This quarterly report contains forward-looking statements that are
subject to risks and uncertainties. You should not place undue reliance on those
statements because they are subject to numerous uncertainties and factors
relating to our operations and business environment, all of which are difficult
to predict and many of which are beyond our control. Forward-looking statements
include information concerning our possible or assumed future results of
operations, including descriptions of our business strategy. These statements
often include words such as "may," "believe," "expect," "anticipate," "intend,"
"plan," "estimate" or similar expressions. These statements are based on
assumptions that we have made in light of our experience in the industry as well
as our perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. As you read and consider this quarterly report, you should
understand that these statements are not guarantees of performance or results.
They involve risks, uncertainties and assumptions. Although we believe that
these forward-looking statements are based on reasonable assumptions, you should
be aware that many factors could affect our actual financial results or results
of operations and could cause actual results to differ materially from those in
the forward-looking statements. These factors include:

         o  material facilities and systems disruptions and shutdowns,
         o  our ability to purchase products from suppliers on favorable terms,
         o  product cost and price fluctuations due to market conditions,
         o  failure to locate and acquire acquisition candidates,
         o  dependence on key employees,
         o  our level of debt,
         o  interest rate fluctuations,
         o  future cash flows,
         o  the highly competitive nature of the maintenance, repair and
            operations distribution industry,
         o  general market conditions,
         o  changes in consumer preferences,
         o  adverse publicity and litigation, and
         o  labor and benefit costs and
         o  the other factors listed under "Risk Factors" in our Annual Report
            on Form 10-K filed with the SEC.

         All information contained in this quarterly report is materially
accurate as of the date of this report. New risks and uncertainties arise from
time to time, and it is impossible for us to predict these events or how they
may affect us. In light of these risks and uncertainties, you should keep in
mind that any forward-looking statement made in this quarterly report might not
occur. We assume no obligation to update any forward-looking statements after
the date of this quarterly report as a result of new information, future events
or developments, except as required by federal securities law.

OVERVIEW

         We are a leading direct marketer and specialty distributor of
maintenance, repair and operations, or MRO, products, according to recent
industry publications. We sell plumbing, electrical, hardware, security
hardware, heating, ventilation and air conditioning, or HVAC, and other MRO
products. Our customer base includes multi-family housing, educational, lodging
and health care facilities, professional contractors and other distributors. Our
customers range in size from individual contractors and independent hardware
stores to large institutional real estate owners.


                                       18
<PAGE>

         We market and sell our products primarily through eight distinct and
targeted brands. The product and service offerings of each brand are tailored to
the unique needs of the customer groups it serves. We reach our markets using a
variety of sales channels, including a direct sales force of field sales
representatives, telesales representatives, a direct mail program,
brand-specific e-commerce websites and a national accounts sales program.

              On June 15, 2004, Interline Brands, Inc., a Delaware corporation
("Interline Delaware"), filed a registration statement on Form S-1 with the
Securities and Exchange Commission (File No. 333-116482) in connection with a
proposed initial public offering of shares of its common stock. Interline
Delaware filed amendments to this registration statement on August 3, 2004 and
September 27, 2004. Upon completion of certain proposed reorganization
transactions to be effected in connection with and immediately prior to the
initial public offering, Interline Delaware will be our parent corporation.
Interline Delaware intends to use the proceeds of the offering to repay a
portion of our indebtedness, make cash payments in respect of our preferred
stock, terminate our interest rate swap agreements and for other general
corporate purposes.

CRITICAL ACCOUNTING POLICIES

         In preparing the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America,
management is required to make certain estimates, judgments and assumptions.
These estimates, judgments and assumptions affect the reported amounts of assets
and liabilities, including the disclosure of contingent assets and liabilities,
at the date of the financial statements and the reported amounts of revenues and
expenses during the periods presented. On an ongoing basis, management evaluates
these estimates and assumptions. Management bases its estimates and assumptions
on historical experience and on various other factors that are believed to be
reasonable at the time the estimates and assumptions are made. Actual results
may differ from these estimates and assumptions under different circumstances or
conditions. Following are significant accounting policies that management
believes are the most critical in order to fully understand and evaluate our
financial position and results of operations.

ESTIMATING ALLOWANCES FOR DOUBTFUL ACCOUNTS

         We maintain allowances for doubtful accounts for estimated losses
resulting from the inability to collect outstanding amounts from customers. The
allowances include specific amounts for those accounts that are likely to be
uncollectible, such as accounts of customers in bankruptcy and general
allowances for those accounts that management currently believes to be
collectible but later become uncollectible. Estimates are used to determine the
allowances for bad debts and are based on historical collection experience,
current economic trends, credit-worthiness of customers and changes in customer
payment trends. Adjustments to credit limits are made based upon payment history
and our customers' estimated credit-worthiness. If the financial condition of
our customers were to deteriorate, allowances may be needed which will increase
selling, general and administrative expenses and decrease accounts receivable.
At September 24, 2004, the allowance for doubtful accounts totaled $6.7 million.

INVENTORY

Inventories are valued at the lower of cost or market. All products are valued
on an average cost basis. In order to determine if an inventory provision for
excess or obsolete inventory is necessary, management reviews inventory
quantities on hand, slow movement reports and sales history reports. Management
estimates the provision based on estimated demand for products and market
conditions. If actual market conditions are less favorable than those estimated
by management and if there is a decrease in demand for certain products,
additional write-downs may be required which would increase cost of sales and
decrease inventory values. To the extent historical results are not indicative
of future results and if events occur that affect our relationships with vendors
or the salability of our products, additional write-downs may be needed that
will increase our cost of sales and decrease inventory values. This inventory
provision establishes a new cost basis for such inventory. For the period ended
September 24, 2004, the provision for excess and obsolete inventory totaled $4.1
million.


                                       19
<PAGE>

LONG-LIVED ASSETS

The Company periodically evaluates the period of depreciation or amortization
for long-lived assets to determine whether current circumstances warrant revised
estimates of useful lives. The Company reviews its long-lived assets for
impairment whenever events or changes in circumstances indicate the carrying
value of an asset may not be recoverable. The following factors, if present, may
trigger an impairment review: (1) significant underperformance relative to
expected historical or projected future operating results; (2) significant
negative industry or economic trends; (3) a significant increase in competition;
and (4) a significant increase in interest rates on debt. Recoverability is
measured by a comparison of the carrying amount to the net undiscounted cash
flows expected to be generated by the asset. An impairment loss would be
recorded for the excess of net carrying value over the fair value of the asset
impaired. The fair value is estimated based on expected discounted future cash
flows.

Management must make assumptions regarding estimated future cash flows and other
factors to determine the fair value of these respective assets. If these
estimates or related assumptions change in the future, we may be required to
record an impairment charge. Impairment charges would be included in corporate
general and administrative expenses in our statements of operations, and would
result in reduced carrying amounts of the related assets in our balance sheets.

INTANGIBLE ASSETS AND GOODWILL

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other
Intangible Assets." SFAS 142 requires companies to cease amortizing goodwill
that existed at the time of adoption and establish a new method for testing
goodwill for impairment on an annual basis at the reporting unit level (or an
interim basis if an event occurs that might reduce the fair value of a reporting
unit below its carrying value). The Company has determined that it has one
reporting unit and an annual impairment test is performed for this reporting
unit. SFAS 142 also requires that the carrying value of an identifiable
intangible asset that has an indefinite life be determined by using a fair value
based approach.

The valuation of goodwill and intangibles with indefinite useful lives for
impairment requires management to use significant judgments and estimates
including, but not limited to, projected future revenue and cash flows. Future
cash flows can be affected by changes in industry or market conditions or the
rate and extent to which anticipated synergies or cost savings are realized with
newly acquired entities. Although no goodwill impairment has been recorded to
date, there can be no assurances that future goodwill impairments will not
occur.

LEGAL CONTINGENCIES

From time to time, in the course of our business, we become involved in legal
proceedings. In accordance with SFAS 5 "Accounting for Contingencies," if it is
probable that, as a result of a pending legal claim, an asset had been impaired
or a liability had been incurred at the date of the financial statements and the
amount of the loss is estimable, an accrual for the costs to resolve the claim
is recorded in accrued expenses in our balance sheets. Professional fees related
to legal claims are included in selling, general and administrative expenses in
our statements of operations. Management, with the assistance of counsel,
determines whether it is probable that a liability from a legal claim has been
incurred and estimates the amount of loss. The analysis is based upon potential
results, assuming a combination of litigation and settlement strategies.
Management does not believe that currently pending proceedings will have a
material adverse effect on our consolidated financial position. It is possible,
however, that future results of operations for any particular period could be
materially affected by changes in our assumptions related to these proceedings.

DERIVATIVE FINANCIAL INSTRUMENTS

We periodically enter into derivative financial instruments, including interest
rate exchange agreements, or swaps, to manage exposure to fluctuations in
interest rates on our debt. Under our current swap agreements, we pay a fixed
rate on the notional amount to a bank and the bank pays us a variable rate on
the notional amount equal to a base LIBOR rate. Our existing interest rate swaps
do not qualify for hedge accounting under SFAS 133 "Accounting for Derivative
Statements and Hedging Activities," and are recorded at fair value in our
balance sheet with changes in the fair value reflected in non-operating expense.
The fair market value of these instruments is


                                       20
<PAGE>

determined by quotes obtained from the related counter parties. The valuation of
these derivative instruments is a significant estimate that is largely affected
by changes in interest rates and market volatility. If interest rates
significantly increase or decrease or interest rate volatility increases or
decreases, the value of these instruments will significantly change, resulting
in an impact on our earnings.

Periodically, we perform an analysis to determine the effect on interest expense
of instantaneous and sustained parallel shifts in interest rates of plus or
minus 100 basis points over a period of twelve months. As of September 24, 2004,
this analysis reflected that a 100 basis point change in interest rates would
have resulted in a change in the fair value of the interest rate swaps of
approximately $1.3 million. While this simulation is a useful measure of our
sensitivity to changing rates, it is not a forecast of the future results and is
based on many assumptions that, if changed, could cause a different outcome. In
addition, a change in U.S. Treasury rates in the designated amounts accompanied
by a change in the shape of the Treasury yield curve would cause significantly
different changes to the fair value of these instruments.

RESULTS OF OPERATIONS

         The following discussion includes references to the term daily sales.
Daily sales are defined as sales for a period of time divided by the number of
shipping days in that period of time.

THREE MONTHS ENDED SEPTEMBER 24, 2004 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 26, 2003

         OVERVIEW. Continued targeted investment during the third quarter of the
year in our organic growth initiatives, improved overall market conditions and
acquisition growth associated with our November 2003 Florida Lighting
acquisition resulted in net sales growth of $23.7 million in the third quarter
of the year, a 14.2% increase over the comparable prior year period on the same
number of shipping days. Gross margins continued in excess of 38% and we
realized leverage in operating expenses on the higher sales as the operating
income margin improved to 10.8% from 9.8% for the comparable prior year period.

         NET SALES. Our net sales increased by $23.7 million, or 14.2%, to
$190.4 million in the three months ended September 2004 from $166.7 million in
the three months ended September 2003. Daily sales were $3.0 million in the
three months ended September 2004 and $2.6 million in the three months ended
September 2003. The $23.7 million sales increase was attributable to $8.8
million from our Florida Lighting acquisition referenced above and the remaining
increase resulted from a combination of the new sales and growth initiatives and
improved demand for our products.

         GROSS PROFIT. Gross profit increased by $9.8 million, or 15.5%, to
$73.2 million in the three months ended September 2004 from $63.4 million in the
three months ended September 2003. Gross profit margins increased to 38.4% for
the three months ended September 2004 from 38.0% for the three months ended
September 2003. The increase in gross profit percent was a result of improved
operating efficiencies at our national distribution center, higher gross margins
realized from our Florida Lighting acquisition, offset in part by a change in
product mix.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses, or SG&A expenses, increased by $6.0 million, or 13.8%,
to $49.7 million in the three months ended September 2004 from $43.7 million in
the three months ended September 2003. Increased SG&A expenses related to our
Florida Lighting acquisition accounted for $2.9 million of the $6.0 million
increase. Approximately $1.5 million of the increase was attributable to
increased investments in new marketing initiatives. In addition, certain
expenses within SG&A, such as the costs of running distribution centers,
delivery expenses and selling expenses, fluctuate with sales volume, and most of
the remaining increase in SG&A expenses related to these items. As a percentage
of sales, SG&A expenses improved slightly to 26.1% of net sales from 26.2% of
net sales as we leveraged some operating expenses over higher net sales numbers.

          DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
decreased by $0.1 million, or 4.7%, to $3.0 million in the three months ended
September 2004 from $3.1 million in the three months ended September 2003.

         SPECIAL COSTS AND EXPENSES. There were no special costs and expenses
during the three months ended September 2004 and $0.1 million in the three
months ended September 2003. Special costs and expenses


                                       21
<PAGE>

consisted of non-recurring costs incurred in connection with our acquisition of
Barnett Inc., the "Barnett Acquisition", in September 2000. This decrease was
due to the fact that the consolidation of the Barnett Acquisition is complete.

         OPERATING INCOME. As a result of the foregoing, operating income
increased by $4.1 million, or 24.8%, to $20.5 million in the three months ended
September 2004 from $16.4 million in the three months ended September 2003.

         CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS. We recorded a gain of $1.5
million in the three months ended September 2004 and $2.2 million in the three
months ended September 2003 related to changes in the market value of our
interest rate swap instruments. The non-cash gains were attributable to changes
in market conditions, including but not limited to fluctuations in interest
rates, general market volatility, and the remaining tenor of our instruments.

         INTEREST EXPENSE. Interest expense was $10.3 million in the three
months ended September 2004 and September 2003. This was mostly attributable to
our total indebtedness, which remained relatively unchanged period over period.

         PROVISION FOR INCOME TAXES. The provision for income taxes was $4.9
million in the three months ended September 2004 compared to $3.6 million in the
three months ended September 2003. The effective tax rate was 41.6% for the
three months ended September 2004 and 42.6% for the three months ended September
2003.

NINE MONTHS ENDED SEPTEMBER 24, 2004 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 26, 2003

         OVERVIEW. Improvement in current market conditions, our organic growth
initiatives, and the success of our recent strategic acquisition of Florida
Lighting resulted in net sales growth of $67.1 million in the first nine months
of the year, a 14.0% increase over the comparable prior year period on the same
number of shipping days. During the first nine months of the year we invested
approximately $4.0 million in growth initiatives directed at increasing sales
volume in each of the three markets that we serve - the facilities maintenance,
professional contractor and distributor markets. Our organic growth initiatives
include the expansion of our national accounts program, the opening of new
contractor showrooms, product line expansion (specifically our appliance and
HVAC product lines), and geographic expansion through the addition of telesales
representatives. Strong net sales growth of 11.5% in the first quarter, 16.1% in
the second quarter and 14.2% in the third quarter has been supported by our
investment of approximately $19 million in inventory and $24 million in trade
receivables. Our continued focus on working capital during this period of strong
sales growth has allowed us to maintain our inventory and trade accounts
receivable turnover rates at appropriate levels, resulting in the minimal use of
our revolving credit facility as we use current period cash generation to fund
our growth.

         NET SALES. Our net sales increased by $67.1 million, or 14.0%, to
$548.4 million in the nine months ended September 2004 from $481.2 million in
the nine months ended September 2003. Daily sales were $2.9 million in the nine
months ended September 2004 and $2.5 million in the nine months ended September
2003. The $67.1 million sales increase was attributable to $26.1 million from
our Florida Lighting acquisition referenced above and $2.7 million in
reclassified freight revenues and costs. Prior July 2003, freight revenue was
recorded as a reduction of freight costs. The remaining increase was
attributable to new sales and growth initiatives and improved demand for our
products as discussed above. During the third quarter of 2003, we reclassified
freight revenue from selling, general and administrative expenses to net sales,
in order to more properly reflect that these amounts are revenues earned for our
products provided. This reclassification did not have an effect on operating
income. However, on a prospective basis it increases both net sales and selling,
general and administrative costs and reduces our operating margin percent.

         GROSS PROFIT. Gross profit increased by $26.9 million, or 14.7%, to
$209.9 million in the nine months ended September 2004 from $183.0 million in
the nine months ended September 2003. Gross profit margins increased to 38.3%
for the nine months ended September 2004 from 38.0% for the nine months ended
September 2003. After adjusting for the effect of the $2.7 million
reclassification of freight revenue, gross margin for the nine months ended
September 2004 would have been 38.0%.


                                       22
<PAGE>

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased
by $21.4 million, or 16.9%, to $148.1 million in the nine months ended September
2004 from $126.7 million in the nine months ended September 2003. Increased SG&A
expenses related to our Florida Lighting acquisition accounted for $8.5 million
of the $21.4 million increase, and $2.7 million of the increase was attributable
to the freight revenue reclassification previously discussed. Certain expenses
within SG&A, such as the costs of running distribution centers, delivery
expenses and selling expenses, fluctuate with sales volume, and these items
along with increased investment in new sales and marketing initiatives accounted
for the remainder of the increase.

         DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased by $0.7 million, or 7.5%, to $9.4 million in the nine months ended
September 2004 from $8.8 million in the nine months ended September 2003. This
was primarily due to a change in accounting estimate made in the third quarter
of 2003 to change the estimated useful life of certain acquired customer lists
to 17 years, and the amortization associated with our Florida Lighting
acquisition.

         SPECIAL COSTS AND EXPENSES. There were no special costs and expenses
during the nine months ended September 2004 and $0.5 million in the nine months
ended September 2003. Special costs and expenses consisted of non-recurring
costs incurred in connection with the Barnett Acquisition. This decrease was due
to the fact that the consolidation of the Barnett Acquisition is complete.

         OPERATING INCOME. As a result of the foregoing, operating income
increased by $5.3 million, or 11.3%, to $52.4 million in the nine months ended
September 2004 from $47.0 million in the nine months ended September 2003.

         CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS. We recorded a gain of $6.2
million in the nine months ended September 2004 and $3.3 million in the nine
months ended September 2003 related to changes in the market value of our
interest rate swap instruments. The non-cash gains were attributable to changes
in market conditions, including but not limited to fluctuations in interest
rates, general market volatility, and the remaining tenor of our instruments.

         INTEREST EXPENSE. Interest expense increased by $0.4 million in the
nine months ended September 2004 to $30.6 million from $30.1 million in the nine
months ended September 2003. This increase was attributable to higher average
debt balances and incrementally higher interest costs associated with our entry
into a new credit facility, and our issuance of $200 million aggregate principal
amount 11.5% senior subordinated notes due 2011, or the 11.5% notes, in May 2003
as part of the Refinancing Transactions (described below in Liquidity and
Capital Resources).

          PROVISION FOR INCOME TAXES. The provision for income taxes was $11.2
million in the nine months ended September 2004 compared to a provision of $2.6
million in the nine months ended September 2003. The effective tax rate for the
nine months ended September 2004 was 39.6% compared to 47.2% in the nine months
ended September 2003. The decrease in the effective tax rate was due primarily
to changes in foreign income taxes and non-deductible expenses.


LIQUIDITY AND CAPITAL RESOURCES

         As of September 24, 2004, we had approximately $49.0 million of
availability under our $65.0 million revolving credit facility. Historically,
our capital requirements have been for debt service obligations, strategic
acquisitions, the expansion and maintenance of our distribution network,
upgrades of our proprietary information systems software and working capital
requirements. We expect this to continue in the foreseeable future.
Historically, we have funded these requirements through internally generated
cash flow and funds borrowed under our credit facility. We expect our cash flow
from operations and the loan availability under our credit facility to be our
primary source of funds in the future. Letters of credit, which are issued under
the revolving credit facility, will be used to support payment obligations
incurred for our general corporate purposes. As of September 24, 2004, we had
$9.0 million of letters of credit issued under the credit facility. With respect
to borrowings under our credit facility, we have the option to borrow at either
LIBOR plus 3.5% or prime plus 2.75%. Interest on the credit facility is payable
quarterly, and with respect to any LIBOR borrowings, on the last day of the
interest period applicable to the term of the borrowing.


                                       23
<PAGE>

         Net cash provided by operating activities was $7.5 million in the nine
months ended September 2004 compared to $31.7 million in the comparable period
for the prior year. Net cash provided by operating activities in the nine months
ended September 2004 was lower than the prior year period as a result of our
increased investment in inventory and trade accounts receivable associated with
our sales growth. In the first nine months of the prior year period, sales were
relatively flat and we reduced our inventory investments to appropriately match
our sales trends. During the first nine months of 2004, our sales grew 14.0% and
accordingly our inventory levels increased $18.6 million in the nine months
ended September 2004 compared to a decrease of $12.6 million in the nine months
ended September 2003. The increase for the period ending September 2004 was
approximately 15.6% and was in line with our sales growth.

         Net cash used in investing activities was $5.9 million in the nine
months ended September 2004 compared to $7.2 million in the nine months ended
September 2003. Net cash used in investing activities in the nine months ended
September 2004 was primarily attributable to capital expenditures made in the
ordinary course of business. For the nine months ended September 2003, cash used
in investing activities was attributable to purchases of businesses of $3.8
million and capital expenditures made in the ordinary course of business.

         Net cash provided by financing activities totaled $1.2 million in the
nine months ended September 2004 compared to net cash used in financing
activities of $8.0 million in the nine months ended September 2003. Net cash
provided by financing activities in the nine months ended September 2004 was
primarily attributable to net borrowings under our revolving credit facility.
Net cash used in financing activities in the nine months ended September 2003
was attributable to the Refinancing Transactions described below.

         We issued $200 million aggregate principal amount of our 11.5% notes in
May 2003 as part of the Refinancing Transactions as follows. On May 29, 2003, we
entered into a new $205 million senior secured credit facility which consists of
a $140 million term loan facility and a $65.0 million revolving loan facility.
The net proceeds from the offering of the 11.5% notes and the refinancing of our
former credit facility with a new credit facility were used to: (1) repay all
outstanding indebtedness under our former credit facility, (2) redeem all of our
outstanding 16% senior subordinated notes due 2008, (3) pay accrued interest and
related redemption premiums on our former debt and (4) pay transaction fees and
expenses related to the offering and the new credit facility. We refer to these
transactions collectively as the "Refinancing Transactions". As of September 24,
2004, our total indebtedness was $352.3 million (of which $9.0 million was
outstanding in the form of letters of credit), and our senior indebtedness was
$149.0 million. On December 19, 2003 we amended our senior credit facility such
that with respect to any term loans, the applicable rate was reduced from LIBOR
plus 4.5% to LIBOR plus 3.5% or prime plus 2.75%.

         Capital expenditures were $5.4 million in the nine months ended
September 2004 compared to $3.5 million in the nine months ended September 2003.
Capital expenditures as a percentage of sales were 1.0% in the nine months ended
September 2004 and 0.7% in the nine months ended September 2003.

         Our principal working capital need is for inventory and trade accounts
receivable, which have generally increased with the growth in our business. Our
principal sources of cash to fund our working capital needs are cash generated
from operating activities and borrowings under our revolving credit facility.

         We believe that cash flow from operations and available borrowing
capacity under our credit facility will be adequate to finance our ongoing
operational cash flow needs and debt service obligations for the next twelve
months and over the long term.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         We are aware of the potentially unfavorable effects inflationary
pressures may create through higher asset replacement costs and related
depreciation, higher interest rates and higher product and material costs. We
seek to minimize the effects of inflation and changing prices through economies
of purchasing and inventory management resulting in cost reductions and
productivity improvements as well as price increases to maintain reasonable
profit margins. Management believes that inflation (which has been moderate over
the past few


                                       24
<PAGE>

years) did not significantly affect our operating results or markets in fiscal
2003 or the nine months ended September 2004.

         The majority of our purchases from foreign-based suppliers, are from
China and other countries in Asia and are transacted in U.S. dollars.
Accordingly, we have minimal foreign currency risk related to suppliers.

         Periodically, we enter into derivative financial instruments, including
interest rate exchange agreements, or swaps, to manage our exposure to
fluctuations in interest rates on our debt. Under our existing swaps, we pay a
fixed rate on the notional amount to our banks and the banks pay us a variable
rate on the notional amount equal to a base LIBOR rate. The total notional
amount of these transactions was $151.0 million at September 24, 2004. These
agreements, which mature between April and October of 2005, effectively fix the
interest at a weighted average rate of 6.56%. In the nine months ended September
24, 2004 we have recognized a non-cash gain of $6.2 million from the change in
value of our interest rate swaps. This increase in value of the interest rate
swaps is attributable to changes in market conditions including, but not limited
to, fluctuations in interest rates, general market volatility, and the remaining
tenor of our instruments.

         Periodically, we perform an analysis to determine the effect on
interest expense of instantaneous and sustained parallel shifts in interest
rates of plus or minus 100 basis points over a period of twelve months. As of
September 24, 2004, this analysis reflected that a 100 basis point change in
interest rates would have resulted in a change in the fair value of the interest
rate swaps of approximately $1.3 million. While this simulation is a useful
measure of our sensitivity to changing rates, it is not a forecast of the future
results and is based on many assumptions that, if changed, could cause a
different outcome. In addition, a change in U.S. Treasury rates in the
designated amounts accompanied by a change in the shape of the Treasury yield
curve would cause significantly different changes to the fair value of these
instruments.


ITEM 4.  CONTROLS AND PROCEDURES.

         Our management, with the participation of our Chief Executive Officer
and Chief Financial Officer (our principal executive officer and principal
financial officer), evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
as of September 24, 2004. Based on this evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that, as of September 24, 2004, our
disclosure controls and procedures were (1) designed to ensure that material
information relating to us, including our consolidated subsidiaries, is made
known to our Chief Executive Officer and Chief Financial Officer by others
within those entities, particularly during the period in which this report was
being prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms.

         No change in our internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the
quarter ended September 24, 2004 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         We are involved in various legal proceedings that have arisen in the
ordinary course of our business and have not been fully adjudicated. These
actions, when ultimately concluded and determined, will not, in the opinion of
management, have a material effect upon our consolidated financial position,
results of operations or liquidity.


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<PAGE>

ITEM 5.  OTHER INFORMATION

         We are not required to file this Quarterly Report on Form 10-Q pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934. The filing is
required, however, pursuant to the terms of the indenture governing our 11.5%
senior subordinated notes due 2011.

ITEM 6.  EXHIBITS .

         EXHIBITS

         The following exhibits are being filed as part of this Quarterly Report
on Form 10-Q:

   31.1  Certification of Michael J. Grebe as President and Chief Executive
         Officer of Interline Brands, Inc., pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

   31.2  Certification of Charles Blackmon as Vice President and Chief Financial
         Officer of Interline Brands, Inc., pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

  10.30  Employment Agreement, dated as of June 18, 2004, by and between
         Interline Brands, Inc. and Charles Blackmon.

  10.31  Employment Agreement, dated as of August 13, 2004, by and between
         Interline Brands, Inc. and William E. Sanford. (Incorporated by
         reference to the exhibit filed with the registration statement Form S-1
         of Interline Brands, Inc. (a Delaware Corporation) and the amendments
         thereto (File No. 333-116482)).

  10.32  Employment Agreement, dated as of August 13, 2004, by and between
         Interline Brands, Inc. and Michael J. Grebe. (Incorporated by reference
         to the exhibit filed with the registration statement Form S-1 of
         Interline Brands, Inc. (a Delaware Corporation) and the amendments
         thereto (File No. 333-116482)).

  10.33  Employment Agreement, dated as of September 23, 2004, by and between
         Interline Brands, Inc. and William R. Pray. (Incorporated by reference
         to the exhibit filed with the registration statement Form S-1 of
         Interline Brands, Inc. (a Delaware Corporation) and the amendments
         thereto (File No. 333-116482)).

  10.34  Employment Agreement, dated as of September 27, 2004, by and between
         Interline Brands, Inc. and Fred Bravo. (Incorporated by reference to
         the exhibit filed with the registration statement Form S-1 of Interline
         Brands, Inc. (a Delaware Corporation) and the amendments thereto (File
         No. 333-116482)).

  10.35  Employment Agreement, dated as of September 27, 2004, by and between
         Interline Brands, Inc. and Laurence W. Howard.

  10.36  Employment Agreement, dated as of September 27, 2004, by and between
         Interline Brands, Inc. and Pamela L. Maxwell. (Incorporated by
         reference to the exhibit filed with the registration statement Form S-1
         of Interline Brands, Inc. (a Delaware Corporation) and the amendments
         thereto (File No. 333-116482)).


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<PAGE>


                               SIGNATURES

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

                                 INTERLINE BRANDS, INC.



                                  BY: /s/ Charles Blackmon
                                      ------------------------------------------
                                      Charles Blackmon
                                      Vice President and Chief Financial Officer

                                      (Duly Authorized Signatory and Principal
                                       Financial Officer)


Date: November 8, 2004




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