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

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

                                   FORM 10-Q

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

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

                  For the quarterly period ended June 30, 1997

                                       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:  0-24728

                           -------------------------
                       EQUITY CORPORATION INTERNATIONAL
            (Exact name of registrant as specified in its charter)

                                    DELAWARE
                        (State or other jurisdiction of
                         incorporation or organization)

                                   75-2521142
                    (I.R.S. employer identification number)

                       415 SOUTH FIRST STREET, SUITE 210
                                  LUFKIN, TEXAS
                    (Address of principal executive offices)

                                     75901
                                  (Zip Code)

                                 (409) 631-8700
              (Registrant's telephone number, including area code)
                           -------------------------

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports) and (2) has been subject to such 
filing requirements for the past 90 days.
Yes /X/      No

The number of shares of the registrant's Common Stock outstanding as of 
June 30, 1997 was 20,753,166.

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

<PAGE> 

                       EQUITY CORPORATION INTERNATIONAL
                                     INDEX

                                                                          Page
Part I.  Financial Information                                            ----

         Item 1. Financial Statements (Unaudited)

                 Consolidated Balance Sheet
                    June 30, 1997 and December 31, 1996......................3

                 Consolidated Statement of Operations
                    Three and Six Months Ended June 30, 1997 and 1996........4

                 Consolidated Statement of Cash Flows
                    Six Months Ended June 30, 1997 and 1996..................5

                 Consolidated Statement of Stockholders' Equity
                    Six Months Ended June 30, 1997...........................6

                 Notes to the Consolidated Financial Statements..............7

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

Part II. Other Information

         Item 6. Exhibits and Reports on Form 8-K...........................20

Signature...................................................................21


FORWARD-LOOKING-STATEMENTS
This Form 10-Q includes "forward-looking statements" within the meaning of 
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the 
Securities Exchange Act of 1934, as amended.  All statements other than 
statements of historical facts included in this Form 10-Q are forward-looking 
statements.  The expectations reflected in the forward-looking statements are 
based on the Company's current views with respect to future events as well as 
assumptions made by and information currently available to management.  
Important factors that could cause actual results to differ materially from 
expectations ("Cautionary Statements") are disclosed in this Form 10-Q and the 
Company's annual report on Form 10-K, including without limitation in 
conjunction with the forward-looking statements included in this Form 10-Q.  
All subsequent written and oral forward-looking statements attributable to the 
Company or persons acting on its behalf are expressly qualified in their 
entirety by the Cautionary Statements.

                                       2

<PAGE>

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

                       EQUITY CORPORATION INTERNATIONAL
                          CONSOLIDATED BALANCE SHEET
                                 (Unaudited)
<TABLE>
<CAPTION>
                                                         June 30,    Dec. 31,
(In thousands, except share data)                          1997        1996
------------------------------------------------------------------------------
<S>                                                      <C>         <C>
                      ASSETS
Current assets:
   Cash and cash equivalents..........................   $   6,845   $  12,654
   Receivables, net of allowances.....................       9,213       9,050
   Inventories........................................       7,152       6,029
   Other..............................................       3,005       1,825
                                                         ---------   ---------
      Total current assets............................      26,215      29,558

Preneed funeral contracts.............................     193,871     156,028
Cemetery properties, at cost..........................      95,001      84,706
Long-term receivables, net of allowances..............      48,819      37,226
Property, plant and equipment, at cost (net)..........      75,245      57,263
Deferred charges and other assets.....................      16,351       7,986
Names and reputations (net)...........................     115,471      71,124
                                                         ---------   ---------
      Total assets....................................   $ 570,973   $ 443,891
                                                         =========   =========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued liabilities...........   $   7,359   $   6,943
   Income taxes payable...............................          --         294
   Deferred income taxes..............................       3,146       2,605
   Current maturities of long-term debt...............         829         537
                                                         ---------   ---------
      Total current liabilities.......................      11,334      10,379

Deferred preneed funeral contract revenues............     199,261     161,153
Long-term debt........................................      98,226      49,197
Deferred cemetery costs...............................      25,481      21,268
Deferred income taxes.................................      22,852      22,799
Other liabilities.....................................       1,934       1,631
Commitments and contingencies.........................                        
Stockholders' equity:
   Preferred stock....................................          --          --
   Common Stock, $.01 par value; 50,000,000 shares
      authorized; 20,753,166 and 19,322,723 shares issued
      and outstanding in 1997 and 1996, respectively..         208         193
   Capital in excess of par value.....................     184,320     157,468
   Retained earnings..................................      27,349      19,803
   Foreign translation adjustment.....................           8          --
                                                         ---------   ---------
      Total stockholders' equity......................     211,885     177,464
                                                         ---------   ---------
      Total liabilities and stockholders' equity......   $ 570,973   $ 443,891
                                                         =========   =========

</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       3

<PAGE> 

                       EQUITY CORPORATION INTERNATIONAL
                     CONSOLIDATED STATEMENT OF OPERATIONS 
                                 (Unaudited)
<TABLE>
<CAPTION>

(In thousands, except per share data)
--------------------------------------------------------------------------
                             Three months ended        Six months ended
                                 June 30,                  June 30,
                             1997        1996          1997        1996
<S>                          <C>         <C>           <C>         <C>
Net revenues:
   Funeral.................  $ 19,211    $ 12,240      $ 39,661    $ 24,986
   Cemetery................    11,701       9,286        21,831      17,535
   Other...................        --          --         1,674       2,085
                             --------    --------      --------    --------
                               30,912      21,526        63,166      44,606
                             --------    --------      --------    --------

Costs and expenses:
   Funeral.................    14,504       9,012        28,798      17,807
   Cemetery................     8,073       6,380        15,109      12,144
   Other...................        --          --           924       1,135
                             --------    --------      --------    --------
                               22,577      15,392        44,831      31,086
                             --------    --------      --------    --------

Total gross profit.........     8,335       6,134        18,335      13,520

General and adminis-
   trative expenses........     2,099       1,295         3,834       2,880
                             --------    --------      --------    --------

Operating income...........     6,236       4,839        14,501      10,640

Interest expense, net......     1,143         395         1,924       1,487
                             --------    --------      --------    --------

Income before
   income taxes............     5,093       4,444        12,577       9,153

Provision for
   income taxes............     2,037       1,799         5,031       4,271
                             --------    --------      --------    --------

Net income.................  $  3,056    $  2,645      $  7,546    $  4,882
                             ========    ========      ========    ========

Earnings per share.........  $   0.15    $   0.14      $   0.36    $   0.29
                             ========    ========      ========    ========

Weighted average number
   of common and equivalent
      shares outstanding...    21,028      18,273        20,721      16,679
                             ========    ========      ========    ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       4

<PAGE> 
                        EQUITY CORPORATION INTERNATIONAL
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Six months ended June 30,
(In thousands)                                            1997         1996
------------------------------------------------------------------------------
<S>                                                     <C>          <C>
Cash flows from operating activities:
   Net income.........................................  $  7,546     $  4,882
   Adjustments to reconcile net income                                       
    to net cash provided by operating activities:                            
      Depreciation and amortization...................     3,523        2,252
      Provision for bad debts and contract                                    
       cancellations..................................     2,558        1,992
      Gain on sale of assets..........................      (787)        (880)
      Deferred income taxes...........................       594          803
   Changes in assets and liabilities, net of effects                         
    from acquisitions:                                                       
     Receivables......................................    (7,550)      (6,082)
     Inventories......................................      (157)         (22)
     Other current assets.............................       (19)          59
     Other long-term assets...........................      (898)        (330)
     Accounts payable and accrued liabilities.........      (882)        (672)
     Income taxes payable.............................    (1,411)      (1,061)
     Preneed funeral contracts and associated
      deferred revenues...............................      (163)         (57)
                                                        --------     -------- 

        Net cash provided by operating activities.....     2,354          884
                                                        --------     -------- 

Cash flows from investing activities:
   Capital expenditures...............................    (5,883)      (3,983)
   Proceeds from sale of assets.......................        74        3,006
   Acquisitions, net of cash acquired.................   (16,284)      (9,522)
   Other..............................................        52           83
                                                        --------     --------
        Net cash used in investing activities.........   (22,041)     (10,416) 
                                                        --------     --------
Cash flows from financing activities:
   Net proceeds from issuance of Common Stock.........    22,206       73,043
   Borrowings on long-term debt.......................    11,996          331
   Payments on debt...................................   (20,324)     (55,468)
                                                        --------     -------- 

        Net cash provided by financing activities.....    13,878       17,906 
                                                        --------     -------- 

Increase (decrease) in cash and cash equivalents......    (5,809)       8,374
Cash and cash equivalents at beginning of period......    12,654        6,233
                                                        --------     -------- 

Cash and cash equivalents at end of period............  $  6,845     $ 14,607
                                                        ========     ======== 
</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       5

<PAGE> 
                        EQUITY CORPORATION INTERNATIONAL
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>

(In thousands, except                             Shares         Amount
 number of shares)                                ----------     ----------
                                                  <C>            <C>

Common Stock
   Balance at December 31, 1996.................  19,322,723     $      193
   Issued:
     Equity offering............................   1,199,178             12
     Acquisitions...............................     224,525              3
     Option exercises...........................       6,000             --
     Other......................................         740             --
                                                  ----------     ----------
   Balance at June 30, 1997.....................  20,753,166     $      208
                                                  ==========     ==========

Capital in excess of par value
   Balance at December 31, 1996.................                 $  157,468
     Equity offering............................                     22,089
     Acquisitions...............................                      4,658
     Option exercises...........................                         55
     Other......................................                         50
                                                                 ----------
   Balance at June 30, 1997.....................                 $  184,320
                                                                 ==========

Retained earnings
   Balance at December 31, 1996.................                 $   19,803
     Net income.................................                      7,546
                                                                 ----------
   Balance at June 30, 1997.....................                 $   27,349
                                                                 ==========

Foreign translation adjustment
   Balance at December 31, 1996.................                 $       --
     Translation adjustment.....................                          8
                                                                 ----------
   Balance at June 30, 1997.....................                 $        8
                                                                 ==========

   Total stockholders equity....................                 $  211,885
                                                                 ==========


</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.


                                       6

<PAGE> 
                       EQUITY CORPORATION INTERNATIONAL
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the 
accounts of Equity Corporation International and all majority owned 
subsidiaries ("the Company") and have been prepared pursuant to the rules and 
regulations of the Securities and Exchange Commission. Certain information in 
the notes to the consolidated financial statements normally included in 
financial statements prepared in accordance with generally accepted accounting 
principles has been condensed or omitted pursuant to these rules and 
regulations. In the opinion of management, only adjustments consisting of 
normal recurring accruals considered necessary for a fair presentation have 
been included. Operating results for the interim periods are not necessarily 
indicative of the results that may be expected for the year. Capitalized terms 
not defined herein have the meanings as defined in the notes to the 
consolidated financial statements included in the Company's annual report on 
Form 10-K for the year ended December 31, 1996. For further information, refer 
to the consolidated financial statements and footnotes thereto included in the 
Company's annual report on Form 10-K for the year ended December 31, 1996.

The Company's statutory Federal income tax rate increased from 34% to 35% as 
the Company exceeded the taxable income threshold requiring the higher tax 
rate during 1996.  As a result, the Company recorded through the provision for 
income taxes a one-time charge of $565,000 in the first quarter of 1996 to 
revalue the deferred tax liability accounts to appropriately reflect the 
higher statutory rate.

All assets and liabilities of foreign subsidiaries are translated into U.S. 
dollars at exchange rates in effect as of the end of the reporting period. 
Income and expense items are translated at average exchange rates for the 
reporting period. The resulting translation adjustments are recorded as a 
component of stockholders' equity.

2. ACQUISITIONS
The following table is a summary of acquisitions made during the six months 
ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
                        1997            1996
---------------------------------------------------
<S>                     <C>             <C>
Number acquired:
   Funeral homes........         45              22
   Cemeteries...........          5               1
Purchase price..........$79,889,000     $21,362,000
</TABLE>

The purchase price for these acquisitions consisted of cash, Common Stock and 
debt issued or assumed. Also included in the 1997 purchase price is $924,000 
which represents the net book value of funeral home assets exchanged for one 
of the acquired cemeteries (Note 5). The excess of purchase price over the 
fair value of assets acquired and liabilities assumed is included in Names and 
reputations (net) on the Consolidated Balance Sheet and will be amortized over 
a 40-year period. In connection with acquisitions, the Company enters into 
customary employment, consulting and noncompetition agreements with certain 
employees and former owners of the businesses acquired. In certain situations, 
the Company will prepay a portion of the noncompetition agreements and 
amortize such prepayments on a straight-line basis over the terms of the 
agreements. The purchase prices indicated above do not include $837,000 and 
$430,000 for noncompetition agreements which were prepaid to individuals 
related to businesses acquired in 1997 and 1996, respectively. The 
acquisitions have been accounted for as purchases and their operating results 
have been included since their respective dates of acquisition.

                                       7


<PAGE> 
The net effect of acquisitions (including the exchange discussed above) on the 
Consolidated Balance Sheet was as follows:
<TABLE>
<CAPTION>
                                                     Six months ended June 30,
(In thousands)                                          1997        1996
------------------------------------------------------------------------------
<S>                                                     <C>         <C>       
Current assets........................................  $   2,935   $   1,300 
Preneed funeral contracts.............................     34,598      17,551 
Cemetery properties...................................      9,307       1,650 
Long-term receivables, net of allowances..............      5,908         209 
Property, plant and equipment.........................     14,349       6,813 
Deferred charges and other assets.....................      7,990         462 
Names and reputations.................................     45,435      12,390 
Current liabilities...................................       (827)       (204)
Deferred preneed funeral contract revenues............    (35,026)    (17,643)
Long-term debt........................................    (57,595)    (11,461)
Deferred cemetery costs...............................     (5,018)       (367)
Deferred income taxes.................................         --        (236)
Other liabilities.....................................        (38)       (350)
Common Stock issued...................................     (4,661)         --
                                                        ---------   --------- 
   Total..............................................     17,357      10,114 
   Less cash acquired.................................      1,073         592 
                                                        ---------   --------- 
   Cash used for acquisitions.........................  $  16,284   $   9,522 
                                                        =========   ========= 
</TABLE>

The following represents the unaudited pro forma results of operations for the 
six months ended June 30, 1997 and 1996, assuming the above noted acquisitions 
and exchange had occurred as of January 1, 1996:
<TABLE>
<CAPTION>
(In thousands, except per share data)                   1997         1996
------------------------------------------------------------------------------
<S>                                                     <C>         <C>      
Net revenues..........................................  $  73,103   $  60,934
Income before income taxes............................     13,287      10,303
Net income............................................      7,972       5,566
Earnings per common and equivalent share..............  $    0.38   $    0.33
</TABLE>


                                       8

<PAGE>
3. PRENEED FUNERAL CONTRACTS AND DEFERRED PRENEED FUNERAL CONTRACT REVENUES
The Company sells preneed funeral contracts through various programs providing 
for future funeral services at prices prevailing when the agreement is signed. 
These contracts are included in the Consolidated Balance Sheet as Preneed 
funeral contracts. Payments on these contracts are generally placed in trust 
(pursuant to state law) or are used to pay premiums on life insurance policies 
issued by third party insurers. When the services are performed, approximately 
$90,843,000 and $67,364,000 will be funded by trusts and approximately 
$103,028,000 and $88,664,000 will be funded by insurance policies as of June 
30, 1997 and December 31, 1996, respectively. Accumulated earnings from trust 
funds and increasing insurance benefits have been included to the extent that 
they have accrued through June 30, 1997 and December 31, 1996. The cumulative 
total has been reduced by allowable cash withdrawals for trust earning 
distributions and amounts retained by the Company pursuant to various state 
laws. At June 30, 1997 and December 31, 1996, the amounts collected and held 
in trusts, at cost, which approximates market, were approximately $80,200,000 
and $59,246,000, respectively. The amounts in trusts and all life insurance 
policies are generally transferred to the customer upon contract cancellation.

"Deferred preneed funeral contract revenues" includes the contract amount of 
all price guaranteed funeral services and accumulated trust earnings and 
increasing insurance benefits earned.  The Company defers recognition of trust 
earnings and insurance benefits until performance of the funeral service.  
Upon performance of the funeral service, the Company will recognize the fixed 
contract price and related accumulated trust earnings or increasing insurance 
benefits as funeral service revenues.

4. DEBT
The Company maintains an uncollateralized revolving credit agreement with a 
group of banks that provides for a $100,000,000 line of credit to be used for 
acquisition financing and general corporate purposes. The Company's Credit 
Facility, as amended, provides for a revolving credit period expiring in 
October 1999 and bears interest, at the Company's option, at either (i) the 
prime rate plus up to 0.25% or (ii) the London Interbank Offered Rate plus 
0.75% up to 1.50% depending on the Company's leverage ratio, as defined. The 
weighted average interest rates on amounts borrowed under the Credit Facility 
were 6.84% and 6.39% at June 30, 1997 and December 31, 1996, respectively. In 
addition, the Company pays a commitment fee on unused funds ranging from 0.20% 
to 0.32%, depending on the Company's leverage ratio, as defined. The Credit 
Facility also supports letters of credit totaling $3,152,000 related to one of 
the Company's acquisitions in 1996. The Credit Facility contains customary 
restrictive covenants requiring the Company to maintain certain financial 
ratios and is guaranteed by substantially all of the Company's subsidiaries. 
The Credit Facility will permit the payment of dividends on the Company's 
Common Stock only to the extent the Company maintains a specified net worth. 
Balances outstanding under the Credit Facility totaled $83,453,000 and 
$35,000,000 at June 30, 1997 and December 31, 1996, respectively.


                                       9

<PAGE> 
5. DISPOSITIONS
During January 1997, the Company acquired one cemetery from Service 
Corporation International ("SCI"), a former significant stockholder of the 
Company (Note 6), in exchange for one of the Company's funeral home 
facilities. This was a strategic business decision as the acquired cemetery is 
in close proximity to one of the Company's existing funeral home facilities. 
In connection with the transaction, the Company received consideration of 
$1,674,000, including $250,000 in cash, and recognized a gain of approximately 
$750,000 in the first quarter of 1997.

During March 1996, the Company conveyed to SCI licensing and lease agreements 
related to three funeral home operations which had been previously operated by 
an unaffiliated third party for an aggregate purchase price of $2,085,000. 
This amount and $1,135,000 of related costs and expenses are included in net 
revenues and costs and expenses, respectively, for the six months ended June 
30, 1996.

6. EQUITY OFFERINGS
In February 1997, the Company completed the registration and sale of 7,994,522 
shares of Common Stock owned by SCI which represented SCI's total investment 
in the Company. SCI received all proceeds and paid all expenses related to the 
sale of these shares. In addition, the Company received net proceeds of 
approximately $22,101,000 (after selling commissions and related expenses) in 
connection with the issuance and sale by the Company of 1,199,178 shares of 
Common Stock at $19.25 per share pursuant to the underwriters' exercise of an 
overallotment option granted by the Company. Approximately $13,000,000 of 
these proceeds was used to pay down a portion of the Company's Credit Facility 
and the remainder was used for general corporate purposes, including 
acquisitions.

On May 1, 1996 the Company completed a public offering of 4,335,000 shares of 
its Common Stock at $18.00 per share, including 585,000 shares sold to the 
underwriters pursuant to the overallotment option granted to them, for net 
proceeds of approximately $73,007,000 (after selling commissions and related 
expenses).  The net proceeds were used to payoff amounts outstanding under the 
Credit Facility and the remainder was used for general corporate purposes, 
including acquisitions.

7. RECENT FASB PRONOUNCEMENTS
In February 1997, the FASB issued Statement of Financial Accounting Standards 
("SFAS") No. 128 "Earnings Per Share" which simplifies the standards for 
computing and presenting earnings per share ("EPS") and makes them comparable 
to international EPS standards. This statement is effective for the year 
ending December 31, 1997. Earlier application is not permitted and restatement 
of prior period EPS data is required. The Company does not believe 
implementation of SFAS No. 128 will have a material impact on its EPS.

In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income" 
and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related 
Information." SFAS No. 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of general purpose 
financial statements. SFAS No. 131 establishes standards for the way that 
public enterprises report segment information in annual financial statements 
and requires that those enterprises report selected information about 
operating segments in interim financial reports to shareholders. These 
statements are both effective for fiscal years beginning after December 15, 
1997. The Company does not believe implementation of SFAS Nos. 130 and 131 
will have a material effect on its financial position, results of operation or 
cash flows.


                                       10

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

The Company provides services and products in both the funeral home and 
cemetery segments of the deathcare industry.  The Company has a growth 
strategy which emphasizes an aggressive acquisition program and the 
implementation of revenue enhancement and cost-containment programs. As part 
of this growth strategy, the Company maintains a separate corporate 
development department headed by a senior management executive with 
substantial deathcare experience. The department is responsible for 
identifying, evaluating, negotiating and closing acquisitions of funeral homes 
and cemeteries. With the Company's knowledge of non-metropolitan markets and 
experienced management team, the Company believes that it is well positioned 
to take advantage of the continuing consolidation trend in the deathcare 
industry. The Company's future results of operations will depend in large part 
on the Company's ability to continue to make acquisitions on attractive terms 
and to successfully integrate and manage the acquired properties.


RESULTS OF OPERATIONS

The following is a discussion of the Company's results of operations for the 
three and six month periods ended June 30, 1997 and 1996.  For purposes of 
this discussion, funeral homes and cemeteries owned and operated for the 
entirety of each period being compared are referred to as existing operations. 
Correspondingly, operations acquired or opened during either period being 
compared are referred to as acquired operations.

Total net revenues for the three months ended June 30, 1997 increased 43.6% to 
$30,912,000 from $21,526,000 for the three months ended June 30, 1996.  The 
increase in net revenues reflects an $8,607,000 increase in net revenues 
attributable to acquired operations and a $1,063,000 or 5.1% increase in net 
revenues from existing operations.  The substantial increase in revenues from 
acquired operations is due primarily to the full quarter results of the 68 
funeral homes and five cemeteries acquired between April 1, 1996 and March 31, 
1997 and the partial quarter results of the 26 funeral homes and two 
cemeteries acquired during the three months ended June 30, 1997. The increase 
in revenues from existing operations was attributable primarily to increases 
in preneed sales at cemetery operations.

Gross profit for the three months ended June 30, 1997 increased 35.9% to 
$8,335,000 from $6,134,000 for the comparable prior year quarter.  The 
increase in gross profit is due primarily to a $2,087,000 increase 
attributable to acquired operations and a $244,000 or 4.1% increase from 
existing operations. The increase in gross profit from existing operations was 
attributable primarily to the increase in preneed sales discussed above.


                                       11

<PAGE> 

FUNERAL HOME SEGMENT. The following table sets forth certain information 
regarding the net revenues and gross profit of the Company from its funeral 
home operations during the three months ended June 30, 1997 and 1996.

<TABLE>
<CAPTION>
                                          Three months
                                         ended June 30,          Change
(Dollars in thousands)                   1997      1996      Amount    Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 11,592  $ 11,556  $     36    0.3%
   Acquired operations..................    7,619       400     7,219      *
   Disposed operations..................       --       284      (284)     *
                                           ------    ------    ------
      Total funeral net revenues........ $ 19,211  $ 12,240  $  6,971   57.0%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  2,951  $  2,989  $    (38)  (1.3)%
   Acquired operations..................    1,756       109     1,647       *
   Disposed operations..................       --       130      (130)      *
                                           ------    ------    ------
      Total funeral gross profit........ $  4,707  $  3,228  $  1,479   45.8%
                                           ======    ======    ======

------
*Not meaningful


Total funeral net revenues for the three months ended June 30, 1997 increased 
57.0% to $19,211,000 from $12,240,000 for the prior year quarter, due 
primarily to a $7,219,000 increase attributable to acquired operations.  
Revenues from existing operations increased by 0.3% over the prior year 
quarter as a 2.2% inflationary increase in the average revenue per regular 
service performed along with increased sales of ancillary funeral products was 
offset by a 3.0% decrease in the number of regular funeral services performed.

Total funeral gross profit for the three months ended June 30, 1997 increased 
45.8% to $4,707,000 from $3,228,000 for the three months ended June 30, 1996.  
Excluding the effects of the disposed funeral home operations, funeral gross 
margin decreased to 24.5% from 25.9% due primarily to acquired operations, 
which generally have lower gross margins as compared to the Company's existing 
operations.  Depending on numerous factors including the size of an acquired 
operation, the proximity to other Company operations and market sensitivity, 
it may take 12 to 36 months before margin improvement is realized at an 
acquired operation as a result of new policies and procedures implemented by 
the Company.  Funeral gross margin at existing operations decreased to 25.5% 
from 25.9% for the prior year second quarter primarily as a result of the 
volume declines discussed above coupled with the relatively fixed cost nature 
of funeral home operating costs.




                                       12

<PAGE> 

CEMETERY SEGMENT. The following table sets forth certain information regarding 
the net revenues and gross profit of the Company from its cemetery operations 
during the three months ended June 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                           Three months
                                           ended June 30,         Change
(Dollars in thousands)                     1997      1996      Amount  Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 10,313  $  9,286  $  1,027   11.1%
   Acquired operations..................    1,388        --     1,388      *
                                           ------    ------    ------
      Total cemetery net revenues....... $ 11,701  $  9,286  $  2,415   26.0%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  3,188  $  2,906  $    282    9.7%
   Acquired operations..................      440        --       440      *
                                           ------    ------    ------
      Total cemetery gross profit....... $  3,628  $  2,906  $    722   24.8%
                                           ======    ======    ======

------
*Not meaningful


Total cemetery net revenues for the three months ended June 30, 1997 increased 
26.0% to $11,701,000 from $9,286,000 for the prior year quarter. Cemetery net 
revenues attributable to existing operations increased 11.1% to $10,313,000 
from $9,286,000 for the prior year quarter, due primarily to increases in 
preneed sales.  The increase in net revenues for acquired operations reflects 
the full quarter results of the five cemeteries acquired between April 1, 1996 
and March 31, 1997 along with the partial quarter results of the two 
cemeteries acquired in the three months ended June 30, 1997. 

Total cemetery gross profit for the three months ended June 30, 1997 increased 
24.8% to $3,628,000 from $2,906,000 for the three months ended June 30, 1996. 
Cemetery gross margin at existing operations decreased to 30.9% from 31.3% in 
the second quarter of 1996 due primarily to higher selling expenses associated 
with the increase in preneed sales, partially offset by operating leverage 
achieved on the relatively fixed portion of cemetery cost structure which is 
being spread over a larger revenue base.

General and administrative expenses for the three months ended June 30, 1997 
increased $804,000 or 62.1% over the three months ended June 30, 1996.  This 
increase resulted primarily from nonrecurring expenses in June 1997 totaling 
approximately $200,000 in connection with the Company's listing of its Common 
Stock on the New York Stock Exchange, as well as increased personnel costs and 
professional fees necessary to support a higher rate of growth.

Interest expense for the three months ended June 30, 1997 increased $748,000 
from the comparable prior year quarter, due primarily to higher debt levels as 
average indebtedness outstanding increased to $70.6 million for the current 
year quarter from $36.1 million for the same period in 1996.  The increase in 
average indebtedness outstanding is the result of increased acquisition 
activity during 1997 along with the payoff in 1996 of $52.7 million borrowed 
under the Company's Credit Facility with a portion of the proceeds of the 
Company's equity offering in May 1996.  Interest income of approximately 
$170,000 related to the temporary investment of the Company's equity offering 
proceeds has been netted against interest expense for the three months ended 
June 30, 1996.


                                       13

<PAGE> 
The Company's effective tax rate for the three months ended June 30, 1997 was 
40.0% compared to 40.5% for the comparable three months in 1996.  The Company 
expects the effective tax rate for income generated in the remainder of 1997 
will be approximately 40.0%.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996:
Total net revenues for the six months ended June 30, 1997 increased 41.6% to 
$63,166,000 from $44,606,000 for the six months ended June 30, 1996.  The 
increase in net revenues reflects a $16,496,000 increase in net revenues 
attributable to acquired operations and a $2,997,000 or 7.6% increase in net 
revenues from existing operations.  The substantial increase in revenues from 
acquired operations is due primarily to the full period results of the 59 
funeral homes and three cemeteries acquired in 1996 and the partial period 
results of the 45 funeral homes and five cemeteries acquired during the six 
months ended June 30, 1997.  Included in net revenues for the six months ended 
June 30, 1997 is $1,674,000 related to the sale of one of the Company's 
funeral homes in exchange for a cemetery and $250,000 in cash.  Included in 
net revenues for the six months ended June 30, 1996 is $2,085,000 resulting 
from the Company's sale of several long-term licensing and lease agreements 
related to three funeral homes which had previously been operated by a third 
party.

Gross profit for the six months ended June 30, 1997 increased 35.6% to 
$18,335,000 from $13,520,000 for the comparable prior year period.  The 
increase in gross profit is due primarily to a $4,123,000 increase 
attributable to acquired operations and a $1,121,000 or 9.6% increase from 
existing operations.  The increase in gross profit from existing operations 
was attributable to increased preneed sales at the Company's cemetery 
operations along with improved operational efficiencies at both funeral and 
cemetery operations.

                                       14

<PAGE> 

FUNERAL HOME SEGMENT. The following table sets forth certain information 
regarding the net revenues and gross profit of the Company from its funeral 
home operations during the six months ended June 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                          Six months
                                         ended June 30,          Change
(Dollars in thousands)                   1997      1996      Amount    Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 23,567  $ 22,719  $    848     3.7%
   Acquired operations..................   16,094     1,745    14,349       *
   Disposed operations..................       --       522      (522)      *
                                           ------    ------    ------
      Total funeral net revenues........ $ 39,661  $ 24,986  $ 14,675    58.7%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  6,938  $  6,515  $    423     6.5%
   Acquired operations..................    3,925       435     3,490       *
   Disposed operations..................       --       229      (229)      *
                                           ------    ------    ------
      Total funeral gross profit........ $ 10,863  $  7,179  $  3,684    51.3%
                                           ======    ======    ======

------
*Not meaningful


Total funeral net revenues for the six months ended June 30, 1997 increased 
58.7% to $39,661,000 from $24,986,000 for the prior year period, due primarily 
to a $14,349,000 increase attributable to acquired operations.  The increase 
in revenues from existing operations is primarily attributable to a 2.7% 
inflationary increase in the average revenue per regular service performed, 
offset in part by a 0.5% decrease in the number of regular funeral services 
performed.

Total funeral gross profit for the six months ended June 30, 1997 increased 
51.3% to $10,863,000 from $7,179,000 for the six months ended June 30, 1996.  
Excluding the effects of the disposed funeral home operations, funeral gross 
margin decreased to 27.4% from 28.4% due primarily to acquired operations, 
which generally have lower gross margins as compared to the Company's existing 
operations. Funeral gross margin at existing operations increased to 29.4% 
from 28.7% for the prior year period primarily as a result of sales price 
increases exceeding the cost increases in merchandising and salaries, offset 
in part by the slight volume decline discussed above.




                                       15

<PAGE> 

CEMETERY SEGMENT. The following table sets forth certain information regarding 
the net revenues and gross profit of the Company from its cemetery operations 
during the six months ended June 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                           Six months
                                          ended June 30,          Change
(Dollars in thousands)                    1997      1996      Amount  Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 19,099  $ 16,950  $  2,149   12.7%
   Acquired operations..................    2,732       585     2,147      *
                                           ------    ------    ------
      Total cemetery net revenues....... $ 21,831  $ 17,535  $  4,296   24.5%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  5,909  $  5,211  $    698   13.4%
   Acquired operations..................      813       180       633      *
                                           ------    ------    ------
      Total cemetery gross profit....... $  6,722  $  5,391  $  1,331   24.7%
                                           ======    ======    ======

------
*Not meaningful


Total cemetery net revenues for the six months ended June 30, 1997 increased 
24.5% to $21,831,000 from $17,535,000 for the six months ended June 30, 1996. 
Cemetery net revenues attributable to existing operations for the six months 
ended June 30, 1997 increased 12.7% to $19,099,000 from $16,950,000 for the 
prior year period, due primarily to increases in preneed sales.  

Total cemetery gross profit increased 24.7% to $6,722,000 for the six months 
ended June 30, 1997 from $5,391,000 for the comparable prior year period. 
Cemetery gross margin at existing operations increased slightly to 30.9% from 
30.7% in 1996 due primarily to operating leverage achieved on the relatively 
fixed portion of cemetery cost structure which is being spread over a larger 
revenue base, partially offset by higher selling costs associated with the 
increase in preneed sales.

General and administrative expenses for the six months ended June 30, 1997 
increased $954,000 or 33.1% over the same period in 1996.  This increase 
resulted primarily from nonrecurring New York Stock Exchange listing expenses 
during the second quarter of 1997 as discussed above, as well as increased 
personnel costs and professional fees necessary to support a higher rate of 
growth.  Excluding the effects of the New York Stock Exchange listing expenses 
along with the gains recorded on the asset exchange and sale of licensing and 
lease agreements discussed above, general and administrative expenses as a 
percentage of net revenues decreased to 5.9% from 6.8% in the prior year 
period due to general and administrative expenses being spread over a larger 
revenue base.

Interest expense for the six months ended June 30, 1997 increased $437,000 or 
29.4% from the comparable prior year period, due primarily to higher debt 
levels as average indebtedness outstanding over the 1997 period increased to 
$74.4 million from $33.2 million for the same period in 1996 as a result of 
increased acquisition activity during 1997 along with the payoff of $52.7 
million in 1996 borrowed under the Company's Credit Facility with a portion of 
the proceeds of an equity offering in May 1996.  Partially offsetting this 
increase was the paydown of approximately $13.0 million borrowed under the 
Company's Credit Facility with a portion of the proceeds of an equity offering 
in February 1997. Interest income of approximately $41,000 and $170,000 
related to the temporary investment of equity offering proceeds has been 
netted against interest expense for the six months ended June 30, 1997 and 
1996, respectively.


                                       16

<PAGE> 
The Company's effective tax rate for the six months ended June 30, 1997 was 
40.0% compared to 46.7% for the comparable six months in 1996. The higher rate 
in 1996 was due primarily to a one-time charge of $565,000 in the first 
quarter of 1996 to revalue the Company's deferred tax liability accounts to 
appropriately reflect an increase in the Company's statutory Federal income 
tax rate from 34% to 35% as the Company exceeded the taxable income threshold 
requiring the higher tax rate during 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically relied on cash flow from operations and third 
party borrowings to finance its operations and on third party borrowings, the 
issuance of notes payable and, in certain situations, the issuance of shares 
of Common Stock to sellers of funeral homes and cemeteries to finance its 
acquisition program.  Recently acquired funeral homes typically generate 
positive cash flow immediately following acquisition.  In contrast, recently 
acquired cemeteries typically generate negative cash flow during an 
approximately three to nine month start-up period following the introduction 
of an aggressive preneed cemetery sales effort, although in some cases this 
period has exceeded nine months.  This negative cash flow is typically offset 
by positive cash flow from mature cemetery operations.

Cash and cash equivalents totaled $6.8 million at June 30, 1997, representing 
a decrease of $5.8 million from December 31, 1996.  For the six months ended 
June 30, 1997, net cash flow from operating activities was approximately $2.3 
million, cash used in investing activities totaled approximately $22.0 million 
and cash provided by financing activities amounted to approximately $13.9 
million.  Significant components of cash flow generated from operating 
activities include net income adjusted for non-cash items partially offset by 
an increase in receivables of $7.5 million primarily attributable to a 30.2% 
increase in preneed cemetery sales which are usually financed on an 
installment basis over 36 months. Significant components of cash used in 
investing activities included capital expenditures of $1.3 million related to 
additions and improvements at several funeral home facilities, $1.5 million 
related to the acquisition of professional vehicles and maintenance equipment 
and $0.8 million for upgrades to computer systems and peripheral equipment.  
Additionally, the Company utilized approximately $16.3 million of internal 
funds, including funds drawn on the Credit Facility at December 31, 1996, to 
consummate funeral home and cemetery acquisitions during the six months ended 
June 30, 1997. Significant components of cash provided by financing activities 
included (i) borrowings of approximately $12.0 million which were used, among 
other things, to prepay a portion of the Company's estimated 1997 income 
taxes, finance an agreement with one of the Company's suppliers for the 
storage and delivery of preneed cemetery merchandise and refinance a note 
payable issued in connection with the Company's Canadian acquisitions; (ii) 
$22.1 million of net proceeds received in connection with the sale of the 
Company's Common Stock and the use of a portion of these proceeds to pay $13.0 
million outstanding under the Company's Credit Facility; and (iii) lump sum 
payments totaling approximately $4.9 million to extinguish certain seller 
financed notes and normal scheduled debt payments.

Long-term debt, including current maturities, at June 30, 1997 totaled $99.1 
million as compared to $49.7 million at December 31, 1996.  The increase was 
principally attributable to increased acquisition activity during the six 
months ended June 30, 1997, partially offset by the payoff of $13.0 million 
outstanding under the Credit Facility with a portion of the proceeds from the 
issuance of Common Stock in February 1997, as described below. Long-term debt 
at June 30, 1997 consisted of $83.5 million drawn under the Credit Facility 
and $15.6 million owed under various notes payable to sellers of funeral homes 
and cemeteries. As of June 30, 1997, the Credit Facility also supported 
letters of credit totaling $3.2 million related to one of the Company's 1996 
acquisitions. At June 30, 1997, $13.3 million was available for borrowings 
under the Credit Facility. Any amounts repaid under the Credit Facility are 
available for future borrowings under the terms of the Credit Facility.




                                       17

<PAGE> 
Borrowings under the Credit Facility bear interest, at the Company's option, 
at either (i) the prime rate plus up to 0.25% per annum or (ii) the London 
Interbank Offered Rate plus 0.75% up to 1.50% per annum, depending on the 
Company's leverage ratio, as defined. The weighted average interest rates on 
amounts borrowed under the Credit Facility were 6.84% and 6.39% at June 30, 
1997 and December 31, 1996, respectively. The Credit Facility, which was 
extended in September 1996 and is due October 1999, contains customary 
restrictive covenants, permits the payment of dividends only to the extent the 
Company maintains a specified net worth and requires the Company to maintain 
certain financial ratios. The Credit Facility is guaranteed by substantially 
all of the Company's subsidiaries.

Due to recent and projected future increases in acquisition activity, the 
Company is currently negotiating to increase the line of credit under the 
Credit Facility to $225 million and to obtain more favorable borrowing terms. 
The Company expects to have this new facility in place by the end of the third 
quarter of 1997.

In February 1997, the Company received net proceeds of approximately $22.1 
million (after selling commissions and related expenses) in connection with 
the issuance and sale by the Company of 1,199,178 shares of Common Stock at 
$19.25 per share pursuant to the underwriters' exercise of an overallotment 
option granted by the Company in the registration and sale of shares of Common 
Stock owned by SCI.

The Company currently expects to acquire funeral homes and cemeteries for 
purchase prices aggregating $110 to $115 million in 1997. The Company 
anticipates that the consideration for future acquisitions will consist of a 
combination of cash, long-term notes, the assumption of existing indebtedness 
of the acquired businesses, and, in some cases, the issuance of additional 
shares of the Company's Common Stock.  In June 1997, the Company amended its 
shelf registration statement by increasing to approximately 1,350,000 the 
number of shares of Common Stock to be used to fund acquisitions under such 
registration statement.  As of June 30, 1997, approximately 1,009,000 shares 
of Common Stock remained available for issuance pursuant to this registration 
statement.  The Company anticipates making ongoing capital expenditures of 
approximately $7.9 million in 1997.  Additionally, the Company approved the 
authorization to expend approximately $6.1 million to construct two new 
funeral home facilities and perform significant renovations and improvements 
on certain of its existing funeral home facilities. These expenditures are 
expected to be incurred over the next 9 to 15 months.  Management believes 
that cash flow from operations and the borrowing capacity available under the 
renegotiated Credit Facility should be sufficient to meet its anticipated 
capital expenditures and other operating requirements and to substantially 
fund acquisitions through the third quarter of 1998. However, because future 
cash flows and the availability of financing are subject to a number of 
variables, such as the number and size of acquisitions made by the Company and 
the successful increase in the Credit Facility, there can be no assurance that 
the Company's capital resources will be sufficient to maintain currently 
planned levels of capital expenditures and to fund future acquisitions.  
Additional debt and equity financings may be required in connection with 
future acquisitions. The availability of these capital sources will depend on 
prevailing market conditions and interest rates and the then-existing 
financial condition of the Company.


                                     18


SEASONALITY

Although the deathcare business is relatively stable and fairly predictable, 
the Company's results of operations may periodically fluctuate due to limited 
seasonality and the timing of acquisitions. Revenues from the Company's 
funeral home operations tend to be somewhat greater in the first and fourth 
quarters of each calendar year while revenues from its cemetery operations 
tend to be somewhat greater in the second and fourth quarters of each calendar 
year.

INFLATION

Inflation has not had a significant impact on the results of operations of the 
Company.

RECENT FASB PRONOUNCEMENTS

In February 1997, the FASB issued Statement of Financial Accounting Standards 
("SFAS") No. 128 "Earnings Per Share" which simplifies the standards for 
computing and presenting earnings per share ("EPS") and makes them comparable 
to international EPS standards. This statement is effective for the year 
ending December 31, 1997. Earlier application is not permitted and restatement 
of prior period EPS data is required. The Company does not believe 
implementation of SFAS No. 128 will have a material impact on its EPS.

In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income" 
and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related 
Information. " SFAS No. 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of general purpose 
financial statements. SFAS No. 131 establishes standards for the way that 
public enterprises report segment information in annual financial statements 
and requires that those enterprises report selected information about 
operating segments in interim financial reports to shareholders. These 
statements are both effective for fiscal years beginning after December 15, 
1997. The Company does not believe implementation of SFAS Nos. 130 and 131 
will have a material effect on its financial position, results of operation or 
cash flows.




                                      19

<PAGE> 

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     11.1 -  Statement regarding computation of per share earnings

     27   -  Financial Data Schedule


(b)  Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the quarter ended 
     June 30, 1997.

                                      20

<PAGE> 

SIGNATURE

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 thereunto duly authorized.

Date:  August 14, 1997

EQUITY CORPORATION INTERNATIONAL

By:  /s/ W. Cardon Gerner
     ------------------------
     Senior Vice President
     Chief Financial Officer
    (Principal Financial Officer and Duly Authorized Officer)


                                      21



</TABLE>